David Hunter, Chief Macro Strategist at Contrarian Macro...

David Hunter, Chief Macro Strategist at Contrarian Macro Advisors, has consistently forecasted a significant "melt-up" in equity markets, followed by a severe deflationary bust. Over the years, he has adjusted his projections to reflect evolving market conditions.

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Melt-Up Phases & Target Levels

Hunter's predictions have evolved as follows:

2020: Projected the S&P 500 reaching 4,000 during a "final melt-up" phase before a significant downturn.

2021: Updated his forecast, anticipating the S&P 500 to peak between 6,000 and 7,000, citing parallels to historical market bubbles.

2024: Suggested the S&P 500 could surge to approximately 7,500 before a dramatic crash occurs.

2025: Most recently, Hunter has indicated the S&P 500 might reach as high as 8,000 in a final euphoric rally, driven by factors such as excessive leverage and investor complacency.

Throughout these periods, Hunter has emphasized that these melt-ups are characterized by parabolic moves, often preceding substantial corrections.

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Post-Melt-Up Crash Projections

Following the anticipated melt-up, Hunter foresees a severe market downturn:

Magnitude: An approximate 80% decline in equity markets, surpassing the severity of the 2008 financial crisis.

Catalysts: Factors such as excessive leverage, derivative exposures, and potential policy missteps by central banks are expected to exacerbate the downturn.

Duration: A deflationary bust lasting 12–18 months, marked by significant economic contraction and financial instability.

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Commodities Outlook

In the context of the anticipated market dynamics, Hunter has also provided forecasts for commodities:

Gold: Expected to reach $3,400 before the bust, with potential to soar to $20,000 in the subsequent inflationary recovery.

Silver: Projected to hit $75 pre-bust, potentially climbing to $500 in the longer term.

Oil: Anticipated to drop to $30 during the bust, then surge to $500 by the next decade.

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Strategic Considerations

Hunter's overarching thesis underscores the cyclical nature of markets and the potential for extreme moves driven by investor psychology and macroeconomic factors. He advocates for vigilance and preparedness, suggesting that while the melt-up phase may offer substantial gains, it could be followed by a rapid and severe downturn.

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*Note: The above information is based on Hunter's publicly stated forecasts and should not be construed as financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions.*

From ChatGPT...

Haven't we already had the melt up phase? He's broken his targets a few times (albeit not in a surge). The melt down or collapse might be here now. The earlier signal came from the dump a few months ago. We have had the recovery "it's all good" phase nearly reaching the prior tops - let's call it the false delusional phase.

The crash pic of the market stages is becoming true once again. Trader psychology continues the same way each time. Remove the blinkers and get ready for a wild ride down.