Since December 2021, market crash expert Michael Markowski has been burning the midnight oil to conduct empirical (1871-2022) research on the following below. Based on the findings and his prior research of secular bull and bear markets from 1802 to 2009, he is predicting that the S&P 500’s all-time high (4818.62) reached on 1/4/22 will prove to be the high for the index’s secular bull (2009-2022) market.
- S&P 500 PE ratios
- S&P 500 dividend yields
- Inflation
- 10-year US Treasury bond yields
Additionally, from his analysis of the above, the probability is high for the US to soon experience its third Great Depression since 1920 and its first since 1929. Markowski discovered that the 2020-2022 period for the US stock market and economy was eerily similar to the conditions which led to the 1920 to 1921 Great Depression. The Depression, which resulted in a 46% decline for the Dow Jones index, has been overshadowed by its 1929-1939 little brother. It began after the 1918-1920 outbreak of the Spanish Flu in the US. Up until Covid, the Spanish Flu held the record for deaths of US citizens (675,000) due to a pandemic. See, “The depression of 1920-1921: Why historians — and economists — often overlook it”.
According to Michael, 1920–1921 was characterized by extreme gyrations for the Consumer Price Index. Inflation went from 7% in November of 1920 to -15.8%, in June 1921, the largest ever percentage decline covering 140 years of data. Wholesale prices fell 36.8%, the most severe drop since the American Revolutionary War. The peak to trough percentage decline for the consumer price index from 1920 to 1921 exceeded every year of the 1929-1939 Great Depression.
Mr. Markowski is in the process of preparing his research findings to be published as soon as possible and hopefully during the week of February 14. The report will provide the rationale and substantive data which support his predictions.
Michael is very concerned about a market crash occurring imminently for the following reasons:
- The readings from his SCPA algorithm, which accurately predicted the minimum 34% decline for the S&P 500 in 2020, has indicated that there is a high probability for a 34% decline by as soon as end of February. See “Probability of 34% Decline for S&P 500 by end of February 2022, High”.
- An invasion of the Ukraine by Russia could be the catalyst for a swift decline of 34%. In anticipation of an invasion the S&P 500 declined by 2% on Friday, February 11th.
- The signal for the Bull & Bear Tracker (BBT), another of Michael’s algorithms, went from green to red on 2/11/2022. The BBT was accurate in predicting a crash for another geopolitical event, Brexit in June of 2016. For the highly volatile first quarter of 2020, the BBT gained 56% versus a loss of 21% for the S&P 500. From March 2018 through January 2022, the BBT gained 207% vs. a gain of 69% for the S&P 500.
Michael is recommending the following:
- View 4 minute, 35 second “What is the difference between a secular bear and a cyclical bear video?” (programmer note. Insert link to AT secular bears videos page) to learn about the secular bear market which began when the secular bull ended in early January 2022
- View “Super vs. Standard Bubbles” excerpt (11 minute, 14 seconds) from a January 2022, Bloomberg “GMO’s Grantham Predicts A 50% Plunge in Stocks” interview of Jeremy Grantham. Bloomberg named him among their “50 Most Influential persons” in 2011 due to his expertise in identifying stock market bubbles. See also, September 2007, Fortune Magazine, “Danger: Steep drop ahead” article in which he predicted 2008 crash. Additional excerpts and entire Bloomberg interview of Mr. Grantham available here.
- Purchase CBOE Volatility index (VIX) related shares (UVXY) and call options (UVXY calls expiring March 4, @ $17.00 strike) to hedge possible market crash. VIX and securities which trade it increase exponentially when volatility increases. The chart at bottom of page depicts that the VIX increased by 382% from the beginning (2/10/20) to the end (3/16/20) of the crash of 2020.
After purchasing VIX related securities be sure to subscribe to a $49.00 lifetime subscription to BullVix.com’s buy-and-hold VIX– alerts to receive texts and emails for when to sell VIX related securities.
To subscribe to AlphaTack Intelligence’s FREE alerts and for access all of Mr. Markowski’s media verifiable market crash predictions go to https://alphatack.com/. AlphaTack, whose slogan is “Growing Assets against the Wind”, specializes in strategies including the Bull & Bear Tracker which enable a portfolio to grown in volatile and declining stock markets.
