According to Jeff Berman, a technical analyst at TheoTrade, the global market has faced a so-called black swan event. In other words, there are signs of negative trends. They started to appear amid the banking crisis in the US and have spread all over the world. This has created a bubble that could burst at any moment.
Veteran technical analyst Jeff Berman pointed to a troubling combination of five assets the upward trend of which is coming to an abrupt end. These five assets include bitcoin, gold, oil, bonds, and S&P 500 stocks.
TheoTrade Chief Market Technician Berman explains that the assets are moving in tandem with each other in an “automatic serial correlation.” This could be called a major bearish sign that suggests overbought conditions in most sectors.
However, most investors underestimate possible risks, ignoring the alarming signs. Berman is deeply concerned about the high likelihood of the black swan event. The fact is that investors have nowhere to hide as there is no diversification in this type of market. However, there is a bubble that may burst at any moment because of “an exogenous cataclysmic risk event or any number of factors.”
The situation is also aggravated by a credit crunch that appeared just after a bank turmoil. Bierman supposes that it is darkening the outlook for business and the economy as well as bumping up volatility.
