Stocks are set for a short-term rebound, after which they will begin to decline, according to Gareth Soloway, the chief market strategist at InTheMoneyStocks.com.
Speaking to Kitco News, Soloway discussed his short- and long-term outlooks with anchor David Lin for the stock and cryptocurrency markets. When asked to comment on whether the biggest crash in world history is going to come this year or month, the chief market strategist cited:
“This might eventually come, but I am not in the camp that it’ll happen in October. I think the Fed again has too much money that they can pump into the markets.”
He noted that American businessman and author of the personal finance book “Rich Dad Poor Dad,” Robert Kiyosaki, was alluding to a knock-on effect when he projected that the general market would crash in October.
Soloway added that you might have a contagion from Evergrande and then a rapid blow-up in the system where you get this epic collapse. However, Soloway confirmed that there’s always the possibility of a black swan exactly where you don’t expect it to happen, but it’s more likely a slower decline.
Buying the dip
On the other hand, Soloway mentioned that when markets reach new all-time highs, they don’t simply go straight down because there are too many people waiting to purchase the dip, mainly since the Federal Reserve has set the market up in such a way that it has worked well since 2009.
Although he noted that we’d had significant corrections, such as in March of 2020, and we’ve recovered within a month or two to get back on track. To put it another way, he said it had conditioned people to purchase any kind of drop, and that will continue to work in the near future with rebounds.
Bitcoin $20,000 price target
At the same time, Soloway still has Bitcoin (BTC) at a $20,000 downside price target; he stated:
“I still anticipate whether you go a little higher to $50,000, which I think is likely you’ll then start to roll over. Eventually breaking $40,000 here and trading between $30,000 and $40,000 before breaking that support. At $30,000 and going down to that $18,000 to $20,000 marker, so again as of now, this is the price action that generally you would anticipate.”
Finally, Soloway considers that people calling for Bitcoin to go to $100,000 or more have some teeth to their arguments, stating it’s a possible scenario. However, for the time being, he considers that the chart is still firmly defined by Bitcoin’s previous two-cycle cycles.