By my work, everything started to improve for stocks after June 16th.
That was when the list of new 52-week lows peaked and stocks started the process of going up all the time, instead of going down all the time.
In bull markets, stocks go up. In bear markets they go down, not sure if you heard...
Anyway, these days I'm seeing a lot of investors pointing to October 13th as the market bottom, because that's when the S&P500 and some of the other indexes made their lows.
But by then, most stocks had already bottomed. It was only a few of those large-cap indexes left still falling.
In fact, I was interviewed by Maria Bartiromo on national television the very next morning (Oct 14th), and I was telling her how stocks had already been in a bull market for months.
To be clear, the list of Sectors in uptrends kept getting longer throughout the 4th quarter, not shorter.
And so now here we are, with all of those sectors still above their 200 day moving averages. But you can also add Technology and Communications to that list as well.
Warren Buffett was the smart money. And we listened.
Now this week, you can argue that the even smarter money, the company itself, announced a $75 Billion Buyback.
In other words, with all the money that Chevron is making these days, they believe the best thing they can do with all that cash is to buy their own stock.
And so $CVX is now making new all-time highs, again:
It's not a secret around here that Energy stocks have been doing well.
No one here cares that some investors got caught holding the bag in those growthy tech stocks, and didn't have anywhere near enough energy exposure over the past couple of years.
It's not my fault that the S&P500 was only 2% Energy but 26% Technology.
"JC, how could you say we're already in the 8th Month of a new bull market???"
The things people call me over email or on twitter are not something I would repeat in front of my mother, or daughter, and certainly not in front of any of you guys.
But I'm a big boy. I spent a lot of time on trading floors, dugouts and locker rooms. I've heard way worse.
It is interesting, however, to observe the feedback I get from just some basic arithmetic.
This isn't like some random opinion I have about the economy, or Fed policy or earnings. This is just 3rd grade math.
Are more stocks going up? Are more stocks making new highs? Or are more stocks going down and making new lows?
Since June, the answer has been up and certainly not down.
Notice how the new lows list peaked in Q2. Even though some of the large-cap growth-heavy indexes made new lows later in the year, even for just a hot second, by that point there were almost no stocks left that were going down.
Back in the late 1800s Charles H. Dow wrote down all of his Tenets about the market in the Wall Street Journal.
These articles ultimately became known as Dow Theory.
One of the basic tenets that many are familiar with is the confirmation of the Dow Jones Industrial Average and the Dow Jones Transportation Average (which was simply known as the Railroad Average when Charlie was around).
If one of the two indexes is making new highs and the other is rolling over, something is wrong, and the trend is likely changing.
Now, if one of the two indexes is making new lows within an ongoing downtrend, and the other is already putting in higher lows, that bullish divergence is evidence of a change in trend.