Market analyst Benjamin Cowen says the Q4 market selloff in US stocks arrived on schedule, despite arguments that a widely expected correction would never happen.
The call rests on three midterm cycles, and Cowen says it is not an exact science. He says the Nasdaq has dropped over 10%, mirroring 2018. Bitcoin (BTC) holders face the same argument, since he says it also tends to bottom in Q4.
Does Consensus Protect Markets From a Correction?
Cowen said in a video that he flagged the Q4 risk all year, while stressing it was never guaranteed.
He points to 2018, when he says stocks fell 23% late in the year. In 2022, he says, another drop of about 23% began in the third quarter.
According to Cowen, the Russell index has fallen 11% to 12% and the Dow Jones Industrial Average about 7%. Meanwhile, the S&P 500 has slipped about 4%.
Skeptics argued weeks ago that broad expectations would prevent the move. However, Cowen says the same objection preceded Bitcoin’s lows in February and the summer.
He also points to Google’s post-earnings slide as evidence the correction is real. Parent Alphabet closed 12.6% lower on Oct. 29, according to Trefis.
What Could Break the Pattern?
Cowen expects a low within the next couple of months, followed by a bounce. He sees the OpenAI IPO, which he guesses could come in early 2027, as the next major narrative.
Morgan Stanley strategist Mike Wilson, however, sees any dip as a buying opportunity. He says a drop toward 7,100 on the S&P 500 could precede a rally to 8,000.
The slide follows a 2.86% Nasdaq drop on Friday, and analysts have flagged midterm and AI risks this week.
Cowen says the Iran war and today’s midterm elections add volatility. He expects the S&P 500 to be among the last to fall before a policy response from the administration.
The split tests whether broad expectations shield markets from seasonal drawdowns. For Bitcoin, the same test applies, as Cowen’s earlier price warnings show.
