This Bull Market in Stocks

This Bull Market in Stocks


A Bull Market is the condition of a financial market in securities or other assets, in which prices are rising or are expected to continue to rise.

The term “Bull Market” is most often used to refer to the stock market, but can be applied to anything that is traded, such as bonds, real estate, currencies and commodities.

Because prices of securities rise and fall continuously during trading, the term “Bull Market” is reserved for extended periods in which a large portion of security prices are rising.

Bull Markets tend to last for months or even years, as the 1 we are experiencing now that began on 9 March 2009, and in the longest in history.

Bull Markets are driven by optimism, investor confidence and expectations aka sentiment, that strong results should continue for an extended period of time.

It is hard to predict consistently when the trends in the market might change. As part of the difficulty is that Psych effects and speculation often play a large role in the markets

My experience is that Bull Market is a situation in which stock prices rise by 20%, usually after a decline of 18-22% and before a 2nd 18-22% decline.

Analysts only recognize this phenomenon after it has happened.

However, I calleded this Bull Market,on my radio show precisely at 1:00p EST on 9 March 2009, when all 3 major US market indicators hit my support marks at the same time reversed and headed due North. It is now the longest Bull Market in stocks in history.

My work shows that this Bull Market is far from over, and the market is set up for the next leg North.

Another notable Bull Market in recent history was the frame between Y 2003 and 2007. During this time frame, the S&P 500 increased by a good margin after a previous decline, and then as the Y 2008 financial crisis took effect, major declines occurred again after that Bull Market run.

Notably, Bull Markets take place when the economy is strengthening or when it is strong as it is now in the US, the strongest ever according to the official data,with strong GDP and a drop in unemployment and will often coincide with a rise in corporate profits. 

Investor confidence tends to climb throughout a Bull Market time frame. The overall demand for stockswill be positive, along with the overall tone of the market.

That does not mean what people here from talking heads and pundits in the financial media, that is Noise, so tune it out

Some of the Key elements are more easily quantifiable than others. While corporate profits and unemployment are quantifiable, it can be more difficult to gauge the general tone of market commentary aka the Noise.

Supply and demand for securities will go up and down: supply will be weak while demand will be strong. Investors will be eager to buy securities, while few will be willing to sell.

In a Bull Market, investors are more willing to take part in the market in order to gain profits i.e. assume risk.

Riding the Bull

Investors who want to benefit from a Bull Market should buy early or in the case of this 1, buy in on the confirmation of the end of a consolidation, aka correction, in order to take advantage of rising prices and sell them when they have reached a peak.

These points are determined by expert technical analysis, as an example this recent correction off of the September/October highs finished on Christmas eve on a Key reversal that has been confirmed by heavy volume and a 8.0% run North on the S&P 500 YTD.

Although it is hard to determine when the bottom and peak will take place, (no savvy participant ever tries to call thoses marks) most losses will be minimal and are usually temporary.

Because it is difficult to assess the state of the market as it exists all strategies imply degree of risk, and hence risk management.

There is no Magic, there are no Secrets, there is just Knowing how to do it with confidence.

Professionals in the managed money field have the tools, take their time and are dedicated as it is not a fee based business, it is performance based. And currently the savvy money is not chasing this leg of the Bull’s Run. Thus, missing the best January in 30 years.

Money is made constantly in the markets, the Key is to always take what the market gives with no emotion, and know that there will always be a trade.

Have a terrific weekend.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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