Wall Street's “biggest bears” changed their voice to support US stocks: this wave of rebound is not over
$S&P 500 Index(.SPX.US$ $Nasdaq Composite Index(.IXIC.US$ $Dow Jones Industrial Average(.DJI.US$ Michael J. Wilson, the “biggest short on Wall Street,” firmly supported the rebound in US stocks, saying that S&P may be pushed up to 4,300 points, but he still left a “retreat” for himself. He said that if it fails to maintain the 200-day moving average, the rebound will not be realized.
After the US CPI data was released on Thursday, Michael J. Wilson, the “biggest short on Wall Street”, continued to be bullish on US stocks, stressing that this wave of rebound is not over yet. Starting a month ago, his “biggest short on Wall Street” title may have become a thing of the past.
Wilson is one of the most famous bearish people on Wall Street. He accurately predicted the collapse of US stocks this year, but starting October 17, Wilson began to strongly support the “technical” rebound in US stocks. He wrote in his report that the S&P 500 index has fallen 25% this year and is testing the “important support bottom” of the 200-day moving average. This may trigger a technical rebound. It is speculated that the S&P 500 index may rise to 4150 points.
Less than a month later, on November 11, in a media interview after the release of the US CPI data that fell short of expectations, Wilson said that once the S&P 500 breaks through the 200-day moving average (currently around 4081 points),Could push the rebound up to 4,300 points, higher than his previous forecast of 4150, Wilson said:
I don't think the current rebound is over yet. The current market situation will continue for a long time, probably until Thanksgiving, or even early December, because once it breaks through the 200-day moving average, this may stimulate some kind of “fighting spirit” in the market, attract more capital to enter the market, and push the rebound to 4,200-4,300 points.
As inflation peaks and the market expects the Fed to slow down interest rate hikes, Wilson believes this will ease the pressure on growth stocks and other assets and drive the stock market to rebound in the next round. He said:
As inflation peaked and interest rate hikes slowed, the Nasdaq index, which had been lagging behind in this rebound, can now catch up because the rebound in the NASDAQ is directly related to changes in interest rates.
Of course, just like the “retreat” Wilson left for himself in October, he still stated that there was a downside risk and emphasized that it was justThe bear market rebounded, with no fundamental support, he said:
If this market doesn't hold up to the 200-week moving average, it's likely there won't be a rebound. Instead, it is possible to rush directly to 3400 or lower.
As interest rates fell, the price-earnings ratio began to rise. The current rebound in the stock market was driven by valuation, but be aware that this occurred assuming that the yield per share was correctly calculated and the price-earnings ratio was close to fair value. Obviously, they have not reached a reasonable price-earnings ratio. It's still a bear market, and it could tear you apart.
Furthermore, as to whether the collapse of FTX will have an impact on US stocks, Wilson believes that despite the sell-off of cryptocurrencies, the US stock market remains strong, indicating that there is no linkage between cryptocurrency and US stock markets. He said:
Cryptocurrency was sold off on a large scale, and FTX went bankrupt in just a few days. The whole thing sounded scary, yet US stocks continued to rise for two days. It can be seen that the two are linked.
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