Investors anticipating a possible recovery in the stock market might wait longer after an expert warned that more losses could be on the way.
Notably, the market has been on an accelerated downward trajectory, with the benchmark S&P 500 wiping out about $4 trillion from its February 2025 peak as investors remain cautious amid lingering uncertainty, mainly stemming from President Donald Trump’s tariffs.
Upcoming market downturn
In the latest update, Chris Vermeulen, Chief Market Strategist at The Technical Traders, warned of a possible 50% pullback in the stock market that could mirror the declines of past financial crises, he said in an interview with David Lin published on March 11.
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The strategist highlighted the current panic gripping the markets, with the VIX, a key measure of market fear, spiking 19% to levels not seen since December’s heavy selling period.
Vermeulen noted a clear sign of capitulation, pointing to a seven-to-one ratio of selling to buying volume on the New York Stock Exchange.
While he believes the March 10 sell-off could mark a short-term bottom, with a potential bounce extending to March 24-25 based on cycle analysis, he cautioned that this may merely be the first wave of a much larger correction.
Drawing parallels to the 2008 financial crisis and the technology bubble burst, he predicted the S&P 500 could shed 40-50% from its highs, potentially dropping from its current level of around 5600 to as low as 2600 to 2700. He noted that such a decline would breach the 2022 lows, triggering widespread panic among investors and “wreaking havoc” on retirement portfolios.
“I honestly believe the market is going to gun for a 50% pullback and try to break the 2022 lows. That is going to wreck huge havoc on people. <…> The market loves to make lower lows or higher highs, it loves to pierce previous lows. <…> When it’s broken there is going to be a lot of big money just hitting the eject button,” he said.
At the same time, the expert highlighted a mixture of technical and economic signals supporting his bearish thesis. In this case, momentum in key sectors, particularly the “Magnificent Seven” technology stocks, is faltering, with stocks like Tesla (NASDAQ: TSLA) and Nvidia (NASDAQ: NVDA) showing ominous topping patterns.
Beyond equities, Vermeulen noted a broad sell-off across asset classes, including cryptocurrency and precious metals, suggesting a lack of safe havens amid the market panic.
While he sees tech stocks like the NASDAQ as oversold and primed for a short-term rebound, potentially into late March, he remains “most bullish on cash” for the immediate future.
Profiting from market fall
In the longer term, Vermeulen suggested inverse exchange-traded funds (ETFs) as a way to profit from the anticipated free fall, noting that bear markets offer “explosive, quick trades” as prices collapse.
“Playing inverse ETF so as the market just keeps having these waves to the downside, there’s a bounce and then the price starts to roll over and starts a new down trend we hop on an inverse ETF. As the market goes into free fall the ETF goes up so that’s the sweet spot with the bear market,” he added.
Indeed, amid the lingering uncertainty from the tariffs, Steve Hanke, Professor of Applied Economics at Johns Hopkins University, is also warning of a possible downturn.
According to a Finbold report, the scholar cautioned that the United States was ‘going off the cliff.’ He called on policymakers and investors to brace for turbulent times ahead.
This comes against the backdrop of skyrocketing recession odds, with Morgan Stanley projecting that stocks might recover at the end of 2025.
In this line, the banking giant projects that the S&P 500 might face some headwinds in the first half of 2025 before targeting 6,500 toward the end of the year.
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