A New Bull Market?

Are we in the beginning of a new bull market? Is the bottom in? The media is starting to plant the seed. Take a look at the spike in "new bull market" story count...

Google trends is showing similar results when it comes to a "new bull market".

This is interesting to see but not a surprise as it coincides with the AAII Investor Sentiment Survey showing an increase in optimism and decrease in bearishness.

The reality is no one knows if stocks have bottomed and are in the early stages of a "new bull market". We could be. Or we could be in the midst of another bear market rally.

Lets take a look at the price action.

Tech Stocks - QQQ

Large cap tech has rallied more than 20% from the June low and some consider a gain of 20% to be a new bull market.

Price has managed to trade above resistance but looks to be reversing or at least facing some headwinds at the trend line. If it can get above all eyes will be watching for a test of the 200 day moving average.

S&P 500 - SPY

The S&P 500 has rallied just short of 20% and has managed to get above overhead supply/resistance.

The rally remains intact and it looks like it wants to test the 200 day moving average like it did back in April.

Russell 2000 - IWM

Like tech stocks small caps have rallied 20% from the June low. 

It looks like small caps will be first to test the 200 day moving average. Will sellers step in here? Or will bulls keep pushing the price higher?

In the short-term its been a heck of a rally but I'm starting to sense FOMO kicking in which can be an account killer if you chase stocks higher without a plan.

We've been looking for a tradable bottom since early July when we keyed in on sectors that were showing relative strength like Biotech, Financials, Transportation stocks, and Software.

We've had some great trades in the above sectors along with Bitcoin and tech stocks and have been using this strength to take profits on our swing trades.   

So, we got the tradable bottom right but what about longer term or heading into year end? Do you think the bottom is in? Are we in a new bull market?

Let us know what you think.

We'd love to hear from you.

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Nothing in this blog post should be considered investment advice and is provided for educational and entertainment purposes only. The commentary and information represent the opinion of the author and are not recommendations to buy or sell any security or investment product. The author may or may not hold positions in the securities and investments mentioned. Full disclaimer here.