The S&P 500 is currently displaying a pattern that closely resembles the one seen in 2007, just before the financial crisis. Back then, the stock market experienced an 11% drop, followed by a swift recovery, much like what has occurred recently. In 2007, after this rebound, the S&P 500 climbed to a new, slightly higher all-time high before plummeting 66% during the financial crisis.
This suggests that the S&P 500 may soon reach a new record high, which could disappoint the bearish investors and reinvigorate the bullish ones. However, this rally could be deceptive, luring investors into a false sense of security. If the current pattern continues to unfold similarly, the S&P 500 might face a significant downturn within the next 12 to 18 months.
Refer to the chart below, which highlights the parallels between 2024 and 2007.
https://m.primal.net/KMIu.jpg
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