The last time stock market legend Peter Eliades spoke to FOX Business host Neil Cavuto, it was during the “delicate bottom” of the 2022 market, before a two-month rally.
While Stockmarket Cycles publisher and editor was optimistic at the time, he said on Monday’s “Cavuto: Coast to Coast” that he’s going back to his cage.
“I’m going back to my cage again,” Eliades told Cavuto. “I will be called a fierce and ferocious bear.”
While the market expert has claimed to be a “100% cycle technician” when it comes to the market, one key number now “really” stands out: unemployment.
The real numbers for the December jobs report are anemia, not hard. Here’s why Americans should be careful
Employment in the United States slowed in December to the lowest pace in two years, but the labor market remained resilient in the face of higher interest rates, steep inflation, and mounting fears of a recession.
The bosses Adding 223,000 jobs In December, the Labor Department said in its monthly payroll report released on Friday, it exceeded the 200,000 jobs projected by Refinitiv economists. However, it marked a slight slowdown from a downwardly adjusted gain of 256K in November and marked the worst month for job creation since December 2020. The unemployment rate unexpectedly fell to 3.5%, the lowest in five decades.
“My God, this is one of the lowest readings in the last 60 years. You just don’t get down to 3.5% very often,” Eliadis said. “Except the problem is that it works exactly the way your instinct would tell you it will: very low unemployment numbers are usually very bearish for the market.”
From the 1970s to the 1990s, Eliades notes, there was never a unemployment reading like the recent low reading in December. But when the unemployment rate hit just under 4% in April 2000, “that was one of the greatest peaks in market history. The Nasdaq is down 80% 90% from there, so that’s a huge bear market,” he said.
A similar reading of about 4% in February 1966 through 1982, Eliades noted, “The Dow Jones Industrial Average was going nowhere. It hit a thousand in February of ’66, and it didn’t significantly break that thousand until 16 years later.” .”
By 2023, Eliades predicts “another down year” for the US economy, and the turning point will be the volatility index.
“On Friday last week, we closed at the lowest level of the VIX in the whole year to 2022. And what does that indicate? Total satisfaction,” said the market expert. “The market had a bad year, but we’re not going to have two bad years in a row, right? We can’t have two years in a row, can we?”
Eliades also advised that anytime the VIX sees this low, “you’re always at the top of the market in a bear market.”
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The stock market legend said, “If this is still a bear market, and I’m a big proponent of that theory, we’re in trouble now with a low, very low VIX reading.”
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FOX Business’ Megan Heaney contributed to this report.