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If you're waiting for stocks to resume their record-breaking bull run, you might be out of luck, according to one veteran investor.
On CNBC's "Futures Now" on Tuesday, Koyote Capital trader and investor Rick Bensignor highlighted the history and development of bear markets, and noted that stocks could be in the midst of a major decline comparable to the '09 recession.
"If history repeats itself, I could see us getting as low as 1,680 in the S&P," the former head of cross-asset management for Wells Fargo said. That's 11 percent lower than where the S&P 500 was trading on Tuesday and 21 percent from its May high.
Looking at charts of the New York Stock Exchange index, Bensignor noted significant similarities, a cause for concern over the next 12 months. His analysis found that prior to the market highs in 2015, breadth had climbed upward for a period of 320 weeks. In the last bull run, the market rallied for 323 weeks from the secular lows in 2000 to the highs in April and October 2007. Following that advance, there were roughly 92 weeks of declines.
As a result, Bensignor is calling for caution. "Over [this current period] of 92 weeks, if the market in any way duplicates the type of breadth sell-off that we saw from 2007 to 2009, it puts the entire year of 2016 as an equal to bearish [market]."
In other words, expect long-term losses and more volatility if history repeats.
And while things could be different this time, Bensignor maintains that this movement is by no means a coincidence: "On the Street, when people say 'things are different this time,' they rarely are. History often does repeat itself, and this is too similar a type of pattern to just think that there isn't any negativity still to come."
The S&P 500 traded around 1,900 on Tuesday.
As a rough January for stocks comes to an end, BMO Private Bank's chief operating officer Jack Ablin sees a few reasons to be optimistic.
First of all, the decline in stock prices have made U.S. stocks—which he has recently perceived as rather pricey—a better value.
"We are getting close, or closer, to fair value, and I think that's something that investors can eventually sink their teeth into," Ablin said last week on CNBC's "Futures Now."
A tumultuous start to the year for the markets has investors running for cover — in bonds.
The 10-year treasury futures, which trade inversely with the10-year yield, are tracking for their best month of gains since January 2015. This as the 10-year yield has fallen from 2.30 percent to 1.98 percent in the last four weeks. As the ratchet month comes to an end, one technical strategist says there are signs in the chart that could be foreshadowing "a lot of pain" for global assets.
"From the futures perspective, it's getting a little intimidating," Bank of America Merrill Lynch's Paul Ciana told CNBC's "Futures Now" on Thursday.
Looking at a long-term chart of the 10-year Treasury futures, Ciana pointed to a head and shoulders pattern that has been forming over the last several years as cause for concern. As he sees it, a break above 129'20, which corresponds with the late September low in the S&P 500, could activate the pattern and propel the treasurys market sharply higher.
The brutal sell off Wall Street has endured over the last few weeks may have a silver lining.
The S&P 500 Index is currently trading at about 15 times the earnings analysts expect constituent companies to post over the next year, according to FactSet. This reading on this popular measure of valuation, known as "forward P/E," compares to a 15-year average forward P/E ratio of 15.7.
Of course, the conclusion gleaned from a historical comparison depends on the timeframe considered. In this case, it is worth noting that the current valuation level still represents a premium to the average of 14.3 seen over the past five- and ten-year periods.
Meanwhile, and likely because the firm is using different earnings estimates, S&P Capital IQ's current forward valuation number is 15.7, although they also note that is below the 15-year average.
However one does his or her math, there is no escaping the conclusion that by traditional metrics, stocks are cheaper now than they were in the middle of 2014; as record highs were hit in 2015; or even a few weeks ago.
Broadly speaking, what appears to have happened is that even as some investors provide a variety of economic feas or selling stocks ("The recession is nigh!"), analysts haven't substantially reduced their earnings estimates.
That means that the numerator in the "P/E" ratio has fallen, even as the denominator remains relatively static.
Meanwhile, the first earnings to trickle in have verged on decent, as 73 percent of S&P 500 companies have beaten their earnings estimates.
Predicting the short-term fluctuations of a multifaceted and sentiment-driven market is probably a fool's errand. But for long-term-focused investors, the question appears to be: Is the economy actually getting worse, and will earnings subsequently drop?
If their answer to that second, more important question is "no," then increasing their allocation to stocks right now could be a decent proposition.
(A note: Some might prefer to consider a trailing earnings ratio instead, despite the fact that few investors pay today's dollars for last years' results, but this shows a similar result: The last-twelve months number currently shows a reading at 16.3 last-twelve-months' earning, compared to a 15-year average of 17.7, according to numbers provided by FactSet senior earnings analyst John Butters.)
The International Energy Agency renewed concerns about a global oil glut after it said crude oversupply should continue through the end of 2016. The announcement follows the lifting of U.S. sanctions on Iran over the weekend, which experts project will add more crude to the market. Oil prices fell more than 3 percent Tuesday, settling at their lowest level since September 2003.
Despite the overwhelmingly bearish picture for the energy space, one expert maintains his view that we will see oil back above $40 by the end of the year.
"We think oil is going to go higher in the second half of the year because, even with Iran gradually increasing output, we expect the first signs of the rebalancing in the oil market," Mike Wittner said Tuesday on CNBC's "Futures Now." Crude oil has been in a precipitous decline for the last two years as supply and demand continue to drag the market lower. WTI crude is down 70 percent since January 2013.
To say that 2016 — all two weeks of it — has been tough would be a vast understatement.
Global markets have seen more than $3 trillion in losses this year as a heap of selling has pushed stocks around the world either into correction or an outright bear market, according to data pulled by Howard Silverblatt of S&P Dow Jones Indices. However, as many on Wall Street point the finger at the collapse in oil prices and continued turmoil in the Chinese stock market, one market pundit says there's no one to blame but the Federal Reserve.
"I think the reason the market is going down is because the Fed pricked the bubble. The Fed raised rates," Peter Schiff, the head of Euro Pacific Capital told CNBC's "Futures Now" in a recent interview. Schiff is a fierce critic of the central bank, which he believes has done more harm than good with its accomodative monetary policy.
"We are trying to rationalize it by pretending what's happening in the U.S. stock market has to do with factors beyond our control…so people can continue to pretend that everything is fine, that we have a legitimate recovery, the Fed can continue to raise interest rates and everything is going to be great," he added.
The S&P 500 is down more than 9 percent from since Fed Chair Janet Yellen announced she would raise interest rates for the first time in nearly a decade last month. A move in which Schiff, a longtime Fed critic, believes she will quickly have to reverse.
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