Bear Market Is Coming With S&P 500 Rally Stalling Soon, DeMark Says

US stocks are in for another drop that will eventually lead to a bear market in the coming months, according to veteran technical strategist Tom DeMark, who accurately called this year’s top in February and subsequent April low.

DeMark — a closely-followed analyst who’s advised billionaire investors including Paul Tudor Jones, Leon Cooperman and Steve Cohen — uses a system for predicting where markets will move, divined from a half century of chart gazing that’s based on mathematical relationships. He focuses on trend exhaustion, with his mantra being markets top on good news and bottom on bad news.

A confluence of technical indicators, sentiment shifts and cyclical timing models are flashing caution signs, suggesting a drop in the S&P 500 below 4,835, this year’s intraday low in early April. That would represent a more than 20% drop from the gauge’s February peak, pushing the index into a bear market.

“A top is imminent. Too much technical damage has been done,” DeMark said by phone. “Stocks are vulnerable right now and can easily get hit pretty badly if anything quickly changes on the global trade outlook.”

DeMark’s warning comes amid a stock-market rebound that’s put the S&P 500 Index on track to erase all of its losses suffered after President Donald Trump’s tariff announcement last month. The gauge is up for a ninth straight day Friday, which would mark its longest winning streak since 2004.