Is the US the most overvalued stock market in history?
Volatility remains a headwind for U.S. stocks in November after October wrapped one of the worst months for stocks since about 2008.
And the worst may lie ahead, according to perma-bear and longtime StockMarket Cycles Editor Peter Eliades, who says U.S. stocks are facing “one hell of a bear market.”
“We are facing what I would consider, and a lot of good value people consider, to be the most overvalued market in history,” Eliades told FOX Business’ Neil Cavuto on Monday adding that it could last well into 2022.
Although the S&P 500 and Dow Jones industrial average hit historic highs on January 26th, in his opinion the NYSE Composite is the most important index.
“That only has not gone above the January high but it now has a series of lower highs and lower lows – and that’s the definition of a bear market,” he said.
And while the market has seasonality factors within the presidential cycle working in its favor, he said it will end shortly.
“As it turns out on the seasonality basis, which we look at as technicians,” he said. “This period from October of the midterm presidential election through June of next year is the most favorable period within the four-year presidential election.”
After that we could see a “severe” bear market.
“I’m looking for at least as bad of a decline as we saw from 2007 to 2009 which was in the minus 55% category,” he said. “I think we are facing that realistically and perhaps even worse than that.”
Eliades clarified he isn’t making predictions but rather is basing his outlook on the 20-year market cycle.