Don’t be fooled by Wednesday’s market turn, which saw S&P 500 shares Benchmark climbing most since 2008 and significant gains in Bitcoin (BTC) and the wider crypto market, represented by Coindesk 20 (CD20) index.
The rally, which was elicited by President Donald Trump’s announcement of a 90-day break on customs, the social media burned optimism of an impending prolonged bull race in both stocks and crypto. It can be over -optimistic according to analysts at Goldman Sachs and other places that notice that double -digit capital prices are quite common, even under larger bear markets.
“In most bear markets, given light positioning, marginal changes in these variables can have reinforced effects in the markets. As a result, the bear market’s rallies are quite common,” said Goldman’s strategy led by Peter Oppenheimers in a Tuesday note entitled “Bear Market Anatomy – The Path and the Form on Bjørnemarked.
There have been 19 Global Bear Market rallies since the 1980s and on average, “They have lasted 44 days and the MSCI AC world Return is 10% to 15%, ”the note said.
“One of the worst bear markets in history saw about half a dozen large double-digit rallies before everything was said and done,” said Callum Thomas, founder and leader of research on top-down charts, whether X refers to the 1930s. “Is the 90-day rejection of a BMR?”
Whether the recent bounce denotes the beginning of a new bull driving or just a bear market rally will not be ready until later. However, certain properties of a sustained bottom mentioned by Goldman, such as attractive valuations, extremely negative positioning, political intervention and a slowdown in macroeconomic deterioration, are not yet clear.
Federal Reserve will soon offer support, while Trump has only stopped tariffs for 90 days, which means merchant stresses could escalate again. Plus, tariffs on China continue to rise, and if that’s not enough, the stocks are not cheap yet.
