(A reprint of BullsNBears.com by AlphaTack.com)
Michael Markowski, the developer of algorithms that have forecasted the S&P 500’s significant crashes for over a decade, has updated his August 2022 forecast for the S&P 500’s bottom to reach 943.39. At this bottom, which Mr. Markowski has forecasted to occur by the end of 2023, the S&P will have declined by 80.40% from its January 4, 2020 all-time high of 4818.62. The latest bottom is only slightly above Markowski’s lowest monthly forecast since February of 2021, when the S&P 500’s inflation-adjusted (real) dividend yield (Div/Y) went from positive to negative in. (For Markowski’s 2007 to 2022 media-verifiable crash forecasts, please see the table below.)
The August 2022 forecast for the eventual bottom and percentage decline were calculated from the July 2022 inflation rate of 8.5% and the S&P 500’s real Div/Y of −6.89%. The table below depicts all of Mr. Markowski’s S&P 500 target- and percentage- decline forecasts for the first seven months of 2022. The forecasted declines range from −78.10% to −81.72%. AlphaTack.com publishes Mr. Markowski’s forecast updates, which he continues to adjust until the S&P 500’s real dividend yield (Div/Y) goes from negative to positive.
PLEASE NOTE: Mr. Markowski’s article “Inflation to Shoulder Blame for 79.95% S&P 500 Decline” cited later herein, provides details about the Div/Y, which adjusts for inflation. The indicator has been very accurate for determining S&P 500’s major tops and bottoms since 1871.
The forecast for the S&P 500 bottoms and percentage declines were calculated from the S&P 500’s monthly Div/Y. The Div/Y is computed by subtracting the monthly change in the Consumer Price Index, i.e., the inflation rate, from the S&P 500’s nominal yield. The table below depicts how the Div/Y was computed for the first eight months of 2022.
Mr. Markowski is known for his precision forecasts. Markowski’s March 6, 2020 report, “U.S. Stock Market to Decline by Another 22% by Easter”, provided the hard data and rationale for the U.S. and other major foreign stock indices (cited in the table below) to decline by a minimum of 34% from their February 2020 record highs. The article cited that as of February 28, 2020 the indices had already declined by 10.8% to 13.8%. Well before Easter Sunday, April 12, 2020, the indices had declined by 32.1% to 39.9% from their pre-Pandemic 2020 record highs.
Mr. Markowski is also forecasting the S&P 500 to bottom and the U.S. to enter into its Third Great Depression in 2023. His June 2022 articles and “Inflation’s Chaos to Cause 79.95% S&P 500 Decline and 3rd U.S. Great Depression” videos, which support his forecasts, are available at AlphaTack.com under the “Videos” menu and are highly recommended:
1) “Inflation to Shoulder Blame for 79.95% S&P 500 Decline”, Michael Markowski (June 4, 2022), AlphaTack.com, AlphaTack Intel. This article reveals key points, as follows:
- High correlation between the S&P 500’s real (inflation adjusted) dividend yield status (positive or negative) and performance of the index over a century and a half (from 1871 to 2020)
- When the dividend yield was negative the S&P 500 underperformed and was crash-prone
- When the dividend yield was positive the S&P 500 had its best performances
PLEASE NOTE: View the highly recommended 16:38 minute video clip below, “Research Findings Supporting 79.95% S&P 500 Decline” Markowski (June 6, 2022), AlphaTack.com, AlphaTack Intel.
2. “S&P 500’s Bottoms Occur Only When Generational Investors Buy!”, Markowski (June 4, 2022), AlphaTack.com, AlphaTack Intel. This article reveals:
- Why generational investors ― the world’s oldest and largest, including family offices, endowments, sovereign wealth funds, etc. ― are highly disciplined to not buy stocks until the S&P 500 Div/Y goes from negative to positive. View related article entitled, “All Family Offices Need to ‘Come of Age’“, Markowski (April 3, 2022), AlphaTack.com, AlphaTack Intel.
3. “Federal Reserve’s Repeat of 1920−1931 Policy Mistakes Set Stage for Next U.S. Great Depression”, Markowski (June 4, 2022), AlphaTack.com, AlphaTack Intel. This article reveals:
- Fed’s 2020 policy mistake was similar to its 1920 policy mistake, which led to first U.S. Great Depression and 32% S&P 500 decline
- Fed’s 2021 policy mistake is similar to that of 1928−-1929 policy mistake, which led to 85% S&P 500 decline and second U.S. Great Depression
- S&P 500 decline will mimic the Second Great Depression decline of 85%, rather than the 32% decline of the First Great Depression.
PLEASE NOTE: Please also view related 12:47 minute video clip below (Part 2 of 2), entitled, “Research Findings Supporting Third U.S. Great Depression to Begin”, Documented with Part 1 of 2, “Inflation’s Chaos to Cause 79.95% S&P 500 Decline and 3rd U.S. Great Depression”, Part 2 of 2, “Research Findings Supporting Third U.S. Great Depression to Begin” Markowski (April 3, 2022), AlphaTack.com, AlphaTack Intel.
Markowski’s forecasted 80.40% decline for the S&P 500 from its all-time high coincides with the timing of his March 20, 2022 prediction. His prediction was that the first secular bear market since 2000 (dot-com peak) had begun at the S&P 500’s January 4, 2022 all-time high. The table below contains Mr. Markowski’s findings from his research of secular markets and the last three secular bears, which began in1929, 1973 and 2000. The table depicts that for the three prior secular bears, the S&P 500 declined by 47% to 85%. Markowski’s secular bear research findings further support his 80.40% decline forecast.
Michael Markowski, a 45-year financial markets veteran, is the Director of Strategies for AlphaTack whose slogan is “growing assets against the wind”. He conducts empirical research of the past which he then utilizes to develop algorithms to predict the future. His research of Enron’s Financial Statements after its infamous bankruptcy led to the development of a Cash Flow Statement algorithm. The algorithm was utilized to predict a “day of reckoning” for Lehman, Bear Stearns, Merrill Lynch, Morgan Stanley and Goldman Sachs in a September 2007, Equities Magazine article. Michael’s research of prior market crashes led to the development of the Bull & Bear Tracker (BBT) algorithm. From 2018 to 2022, the BBT gained 209% vs. the S&P 500’s 56%. His predictions of all periods of heightened market volatility from 2008 to 2020 and the S&P 500’s exact March 23, 2020 bottom are media verified.