It's A Bull Market Ya Know....

JC Parets
October 30, 2021

What's the definition of a Bull Market?

If you say 20% price appreciation it's probably because you watch too much basic cable.

Are a majority of stocks going higher or are a majority of stocks going lower?

That's how we determine bull and bear markets.

And by the way, individual stocks do NOT have bull and bear markets. The concept of a bull or bear market is a broad market description, not reserved for individual stocks.

If anyone ever tells you that an arbitrary 10% move is a "correction" and 20% is a bull/bear market, then you know they can't be trusted. It's that simple. Move on.

So if you're interested in the way markets actually work, as of earlier this month, when breadth improved, we proclaimed that the bull market was finally back, after the last one came to an end in February.

For a great way to see what the median price change looks like for stocks, we turn to the Value Line Index. This takes away the large-cap bias of some of the most popular market gauges and shows us the median stock performance:

To me this looks like a 25-year base breakout longer-term, and a high and tight flag more short-term.

We like our flags high and tight, just like a military fade.

Go back to the greatest uptrends and bull markets of all-time. You'll find a lot of periods very similar to this one, where prices are digesting recent gains, before breaking out and resuming their uptrends.

That's what I think happens here.

And an upside resolution from this tight little pattern would confirm that.

You agree?

Disagree?

Let us know!

JC

 

 

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