The last time stock market legend Peter Eliades spoke with FOX Business’ Neil Cavuto, it was at the market’s “precise bottom” of 2022, just before the two-month rally.
Although the publisher and editor of Stockmarket Cycles was upbeat at the time, he said on Monday that “Cavuto. Coast to Coast” said he was returning to his cage.
“I’m going back to my cage,” Eliades told Cavuto. “They will call me an evil and ferocious roaring bear.”
While the market pundit claimed to be “100% cyclical technician” when it comes to the market, there is one fundamental number that “really” stands out right now: unemployment.
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U.S. hiring cooled to the slowest rate in two years in December, but the labor market remained resilient in the face of high interest rates, scorching inflation and rising recession fears.
Employers: added 223,000 jobs In December, the Labor Department said in its monthly payrolls report released Friday that it beat the 200,000 jobs forecast by economists at Refinitiv. However, it slowed slightly from November’s subdued gain of 256,000 and marked the worst month of job creation since December 2020. The unemployment rate unexpectedly fell to 3.5%, a five-decade low.
“This is one of the lowest indicators in the last 60 years. You just don’t get down to 3.5 percent that often,” Eliades said. “The problem with the exception is that it works exactly as your instincts would tell you it would; “Very low unemployment numbers are usually very bearish for the market.”
From the 1970s to the 1990s, Eliades noted, there was never an unemployment rate as low as last December. But when in 2000 unemployment hit just under 4% in April, “one of the great tops in market history. The NASDAQ went down 80, 90% from there, so this is a huge bear market,” he said.
From February 1966 to 1982, such an indicator was about 4%, Eliades pointed out. “The Dow Jones Industrial Average was on a road to nowhere. By February of ’66 it had reached a thousand, and for 16 years it never significantly exceeded that thousand. later”:
Going into 2023, Eliades predicted “another down year” for the US economy, and the tipping point will be the volatility index.
“On Friday of last week, we closed at the lowest level for the VIX index for the entire year until 2022. And what does it indicate? Total complacency,” said a market expert. “The market had a bad year, but we won’t have two bad years in a row, can we not have two years in a row?
Eliades further advised that whenever the VIX index sees this low, “so you’ve always been in a bear market at the top of the market.”
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“If this is still a bear market, and I’m on that theory,” says the stock market legend, “then we’re in trouble right now with this low, very low VIX reading.”
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FOX Business’ Megan Henney contributed to this report.