economy
S&P 500 is experiencing violent surge often seen at major market tops. One chart analyst is worried
One chart analyst sees echoes of the dot-com bubble in the S&P 500's latest run-up, as the index has had a sharp surge often seen at major market tops.
TL;DR
- The S&P 500 has surged over 5% in four trading days, reaching a 52-week high.
- This surge pattern has occurred only three other times in the past 30 years, including the period before the dot-com bubble's peak.
- Microsoft's nearly 27% rebound in four trading sessions is the second-largest rally in its history, with the largest occurring in 2000 before a significant stock decline.
- Analyst Jonathan Krinsky believes the current momentum rebound is likely to fail, as investors may use it to sell after experiencing losses.
- Krinsky warns of a potential 'musical chairs' scenario in the market, where money shifts between momentum and value stocks, and participants may be left without a 'chair' when the music stops.