I am still skeptical about this "bull market". Monthly charts show that this is a leg up of a larger bear. I also think that it ended either Friday, or will end early next week. We are five months from the December highs, and eight months from the October lows. Does anyone else think that this is a reaction leg? Or is this bull the real thing????
I think it is the real thing. The negative sentiment is very extreme. The market is going up on negative financial news. The average time above the 50 day moving average of the S&P 500 is increasing while the average time spent below is decreasing. Finally a great number of investors have sworn never to come back to the market. That sounds like a market that is still very "sold out."
I'm in strong agreement. Too many on this board think they're trading Economy futures or Vix futures or whatever. The market already months ago discounted on the down side a long protracted war, $50 crude, and the possible inability of consumers or business to spend normally. Granted I think a mega dramatic upside move is somewhat limited because the market has also failed to discount a bona fide non war double dip. However I will not be shocked to see indicies rally another 10% before a new meaningful high is put in place.
I think Elitetrader is becoming a great sentiment indicator. It seems a person will start a thread on future market direction and you will see the bears pile in with posts on the thread with all the reasons why we won't go up and will crash in horrific fashion thru lows. I am not saying the continuation of the bear market will or will not persist, but what I am getting at is that the contrarian position against the ET majority opinion seems to have merit as a possible market direction indicator. Then again I don't try and predict where the market will go by picking tops and bottoms. I just go with the flow and the immediate trend.
Take a look at a chart for the Nikkei for the past 12 years. They've been in the bear for about that long, but along the way they've seen very powerful rallies to the tune of 30% and more that people thought was the new bull, before of course the bounce ran out and they made new lows again. IMO, at best the economy and market will just get by for many years to come and the DJIA could remain in a channel for years a la the 70's. At worst, we will see much lower lows in the market before it's all over. We'll know the bear is over when people stop asking if the bear is over.
I would use more than one chart comparison to say that the US will continue in a bear market. Bear markets come in all time frames and if Japan's has lasted 12 years there is no reason from that to say that our bear market will last that long.