The 2020 Bull-Bear US Market Forecast

We are in the middle of one of the longest-running bull markets in history. Given that, a lot of people have been calling for a market crash since 2013. However, the stock market has proven them all wrong time and again.

Don’t blame these people for making bad calls, blame the faulty as-reported data they are using.

The use of flawed as-reported information has led to incorrect stock market insights. Fortunately, there is better data and there are better metrics that investors can use.

In May 2013, Valens wrote how falling CDS pointed to a continued bull market, “...analysis of the corporate credit markets today provides one fundamental reason for the stock market rally to continue.”

In November 2014, Valens saw incremental upside for the U.S., “...some analysts and investors see the market as expensive, citing how the current market P/E of about 18x exceeds the long-term average of 15x-17x. However… During prior periods with similar tax and inflation environments, the market P/E ranged from 20x to 22x - indicating more upside still for the U.S.”

Still, in June 2017, Valens’ market analysis showed “more and more factors point to growth acceleration.”

And in December 2018, Valens wrote that they are not seeing an imminent risk of a credit crunch and a market collapse.

True enough, the stock market has continued to rise, and since 2013, the S&P 500 index has been up by 96%.

The Market Phase Cycle framework, powered by better financial and market metrics enabled Valens to have a better view of the overall stock market. This systematic framework focuses on market cycles, equity and credit valuations, and market sentiment in a consistent way. This powerful tool can help investors produce sound insights from short-term and long-term market signals.