A renowned market bear explains why traders are operating with too much 'blind faith' — and makes the case for a 65% stock crash

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Everyone assumes that Federal Reserve interest-rate cuts are a surefire bullish driver for stocks. John Hussman explains why that's flawed thinking.

, he says there's another crucial variable that dictates whether a lowering of rates is truly bullish: market internals, which reflect the overall risk appetite of the market.

It's important to note that negative underlying sentiment is a relatively new phenomenon. Hussman notes that long-running bullish internals have been crucial in helping stocks defy eye-watering valuations and repeatedly hit new highs. But he says when a negative shift occurs for a prolonged period, it's time to get worried.

, and the orange one specifically reflects how the equity index has performed during periods of monetary easing and unfavorable market internals.To explain his point further, Hussman says monetary easing is more nuanced than the popular idea that it amounts to simply"pumping money into the economy.

 

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65? No.

As Trump leaves. Same as Reagan and Bush.

65% huh

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