Opinion: The chart reader who called this stock-market selloff says it’s not over yet.
Craig Johnson calls for S&P 500 sell off below 2,400. Furthermore, he predicts the Dow Jones Industrial Average selloff to around 22,000.
Investors watched the Dow Jones Industrial swing from a 567-point deficit at its low Tuesday to close up 567 points. They probably hoped that the worst of this selloff was over.
However, the technician who predicted back in January that a big correction was coming has four words of advice: don’t be so sure.
Craig Johnson is chief market technician for Piper Jaffray in Minneapolis. He called the current bull market back in 2012. Now he is predicting that the S&P 500 index could decline by as much as 20%. He attributes this primarily to rising yields on 10-year Treasury notes. Furthermore, he believes that this is the end of the 35-year bull market in bonds.
The Dow DJIA and the S&P 500 have fallen 8% from their Jan. 26 peaks. Johnson has warned that the worst of the selloff is yet to come.
“This feels a little too fast from my perspective. We haven’t done anything to reset expectations.”