David Hunter's Final Blow Off Top Scenario for Stocks, Bonds, Gold and Silver
His price targets seem extreme, but not out of the question. Timing is difficult, but we're close to his scenario now (IMHO)
An update from David Hunter from about 10 days ago.
He's sticking with his huge melt-up calls. He said that if the SP500 gets above 4300, next level to watch is 4550 to 4600. We're right at 4300 now.
He's saying that the coming pause in rate hikes (expected from next week's Fed meeting), will be an important catalyst for investors. (He admits that rate cuts tend to be bearish historically, but that this is a "pause" and will be interpreted by the "markets"to be bullish and a huge source of optimism.)
He mentioned that 4.33% yield on the US 10 Year bond back in October marked a peak in rates and the Low in stocks. He expects rates to drop to 2.5% ---which is a huge move. We're at 3.743% as of Friday .
You can see where stocks bottomed last October when US 10 Year rates were about 4.33% and but rates have been moving lower--thus the stock market rally since Oct of last year. So, according to Davide Hunter, bonds will do very well.
As rates move down, the US dollar will go much lower (from 103 to 95.6, pause, then even lower), which will be a big catalyst for rising Gold, Silver and stock market prices.
In summary, investors will have the dollar AND rates on your side, and then you're off to the races with equities, gold and silver. He's targeting $3000 Gold price and $50 or $60 silver prices ultimately. Near term, gold might get down to $1950 (gold is priced at $1975 from Friday), then it'll go to $2400 to $2500, then $3000 this year or so. Silver to $35 as an intermediate level then $60 this or next year +/- (silver is at $24.4 as of Friday).
He's saying none of this will be a straight line. There will be pauses/pullbacks along the way. Obviously this is normal.
Once S&P 500 of 4300 is breached (S&P500 is right at 4300 this past Friday), then getting through 4600, his thinking is that momentum takes over, the stock market could go vertical to S&P500 at $6000 or more in a very short period of time. Same could be said for his ultimate gold, silver, 10 yr bond, and S&P500 ultimate targets.
Fundamentals become irrelevant as momentum takes hold. He's basing this thesis that we'll be completing a 40 to 45 year bull market with a final blow-off top and this will all be met with skepticism the entire way up.
Then, all hell breaks loose. Something will break, something really bad will happen, then a 90% decline in stocks.. Timeline of this is uncertain but one should be out of all these markets at or near his price targets.
I think all of this is credible. It's certainly contrarian. Stocks, bonds, gold, silver will go up and fast. This is not investing advice, it’s just one man’s projection of market psychology.
I'm always hitting "Send" too quick. The US markets are already pretty euphoric as of this past Friday.
See here for current sentiment: https://www.cnn.com/markets/fear-and-greed