A renowned market bear says stocks are setting classic trap before another steep plunge — and says the market is at risk of a 57% drop from current levels
— isn't prepared to give the same all-clear signal. He instead thinks current investor sentiment is falsely assuming that the ongoing market recovery will persist.
That "unusual combination" is increasing Hussman's anxiety over the overall well-being of the market — one he thinks is setting a trap. His view is informed by the four-part "phases of a bubble" economic model popularized by renowned academic"The current position of the market is reminiscent of the 'return to normal' trap in Jean-Paul Rodrigue's familiar chart of speculative bubbles," he said.
Hussman added: "My sense is that investors remain disoriented about where they actually are in the cycle."
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