Stock market crash: Expert warns of 64% drop as bearish signals flash

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A notorious market bear who called the 2000 and 2008 crashes says stocks face the same 3 negative conditions they did in November 2021— and warns the 25% drop that followed will prove to be a 'small opening act' of what's to come

He believes that the combination could mean weakness for stocks in the days ahead.— the notorious bubble sage who called the stock market crashes in 2000 and 2008 — says there's a special cocktail of market conditions right now that spell trouble.

"The last time we observed this combination to a similar degree was in November 2021, shortly before the S&P 500 lost a quarter of its value," Hussman wrote in a July 23 note."Despite enthusiasm about the market rebound since October, I remain convinced that this initial market loss will prove to be a small opening act in the collapse of the most extreme yield-seeking speculative bubble in US history.

Here's Hussman's proprietary measure, illustrated by the red line. When it goes flat, stocks tend to perform poorly.

The chart below shows advances and declines for the S&P 500 in the 40 trading sessions after these criteria have been met.But that's in the near term. Over the long run, Hussman said the S&P 500 could fall as much as 64%.

 

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