The S&P 500 is showing historic bullish momentum: a 95% gain over three years and parallels with the dot-com bubble.
The current bull market in US stocks is confidently etching itself into the history books. Since the end of 2022, the S&P 500 index has posted an impressive 95% gain, automatically placing it in the top 10% of the strongest rallies on record since 1928. These are not just numbers — they are a statement about the strength and scale of the current movement.
For context: the median bull market over a similar time period has delivered investors around 35%. Even the top 25% of historical rallies showed gains of only about 50%. The current result more than doubles that figure, indicating an exceptional concentration of capital and confidence among market participants.
Parallels with the dot-com crash
However, such a powerful surge inevitably attracts the attention of analysts who see in it not only strength but also potential risks. One independent researcher, known under the pseudonym Qmo, conducted a detailed comparison of the current S&P 500 dynamics with the chart of the early 2000s dot-com crash. The result was alarming: the structure of the movement is nearly identical.
Qmo highlights key stages that are repeating: a sharp upward surge, consolidation, the first correction, a weak recovery, and subsequent preparation for a serious collapse. According to his estimates, during the dot-com crash, the S&P 500 lost about 49%, the Nasdaq plunged nearly 78%, and the decline itself lasted over two years. The analyst emphasizes that the current situation is "eerily similar": the index is dominated by tech giant stocks with extreme valuations, and retail investors are exclusively bullish.
Two sides of the same coin
At first glance, the opinions of experts from The Kobeissi Letter and analyst Qmo contradict each other. The former record the historical strength of the momentum, while the latter see classic signs of a late-stage bubble. However, in reality, these are two sides of the same coin. Record growth and rising reversal risk are not antagonists, but characteristic features of an overheated market.
The longer this rally lasts, the more acute the question of its sustainability becomes. Investors should closely monitor macroeconomic signals and valuations, especially in the technology sector. History teaches us that the strongest bull markets often end with the most painful corrections.
My expert opinion: The market is entering a zone of heightened volatility. The historical strength of the momentum does not negate the fundamental risks of overheating. Investors, especially in cryptocurrencies, where the correlation with the Nasdaq is high, should be prepared for sharp movements in both directions. Diversification and hedging are becoming not just a recommendation, but a necessity.