Monday saw the tech stocks tumble downwards and this is what the market is ready to do, says Hussman. Earlier Hussman had predicted the 2007-08 collapse in the share market and has earned the name ‘permabear’ for his correct prophecy about a decade earlier.
According to Hussman, the market will fall by 64 percent in the S&P Index, while it would be 57 percent for the NASDAQ. Further, he also adds that the Dow Jones Industrial Average will go down by 69 percent while the Russian 2000 index would be down by 68 percent.
He detects many signs of weakness in the markets. Hussman predicts a downward move because of the deteriorating credit sensitive industries. He also adds that the participation of stocks in market advances is not high. He observes that many stocks are hitting one-year highs and lows simultaneously that are not very healthy.
He further says that individuals are adopting a cautious approach in their buy and sell attitudes. Hussman has observed that investors are not willing to take a risk in the equity market, which is an attitude that will not move the markets higher up.
Hussman cites that limited stocks like Apple, Amazon.com, Facebook, Netflix Inc., Amazon, and Google were the ones to lift the market and the S&P Index upwards this year.
Earlier in 2000, Hussman had predicted an 83 percent drop in NASDAQ, which however dropped by 77 percent. Hussman hopes that the markets will not drop down so drastically this time.
On Monday, tech stocks saw a deep slump in their value, while the S&P Index had also fallen by 0.58 percent and the Dow Jones had fallen by 0.57 percent and the NASDAQ had fallen by 1.39 percent.