S&P 500 Following 2007 Movement That Led To Severe Crash, Time For Bitcoin To Rally?


S&P 500 Following 2007 Movement That Led To Severe Crash, Time For Bitcoin To Rally?

A stock market crash is inevitable is what has been spoken. And the latest chart further highlights how we are closer to that crash that could very well be following the footsteps of 2007’s market dump.

In an S&P 500 Index chart that shows SPX comparison to that from 2007, the current movement looks erringly similar to that from 12 years back that led to a severe crash. The chart shows how the market during 2016 and 2017 had strong and low volatility run up just like in 2006.

The next phase came in 2018 when the market had a first failed breakout similar to that from 2007 only to experience a sharp decline. From here market moves upwards in an engulfing pattern that if it further follows the previous movement, would drop down hard.

Weather SPX follows the movements of 2008 chart or not, experts have said a crash is imminent. With the US stock market being at its third-most expensive valuation in history, a 50 percent stock market crash would take the valuations to the mean.

When it comes to the reasons that could trigger this crash, they keep on growing. It involves, consecutive GDP misses, pilling of debt that is making new records, the escalating trade wars between the US and other countries, and even Trump losing in 2020 elections could also trigger a sell-off and take down the stock market that could turn out to be worse than 2008.

An upcoming crash has been predicted by experts for some time now. Recently, Wall Street investor Mark Yusko of Morgan Creek Capital also called out for S&P to drop down further lower this year when it delivered its worst May performance in seven years.

He shared how S&P has been in a bear market since September 20018 and the first trademark phase of a bearish bias has been the sharp down-trend last year.

“Like 200, 2001, and 2002, where we had the tech bubble — it burst,” explained Yusko adding “and then, you had the credit burst in 2002. We think 2019 is like 2001. There were a couple of 20 percent bear market rallies which finished down double-digits. And really it was the credit burst in 2002 where you had the real pain. So, we think the bear market is starting to warm up.”

With a stock market crash imminent, one needs to diversify their portfolio with assets that can act as a hedge during those times. Though gold is a popular store of value, Bitcoin is increasingly becoming one as well.

Yusko also called Bitcoin:

“A great diversifying assets. It has a very low correlation, it should be on everybody’s portfolio.”

While predicting Bitcoins future price to be $400,000, he stated that the leading cryptocurrency is much better than gold as it is much easier to divide and transit that make it “superior to Gold.”

This year we saw how Bitcoin outperformed the stock market while the latter tumbled. It could be expected in the future when the stock market will crash, bitcoin might prove its prowess and come out a winner.

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