Okay, Mr. Bull, let’s see what you’re made of. Since last writing where I gave the keys back to the bull, the market has indeed edged up to new highs… and now it’s getting close to needing a pause for breath after running up so high, so fast.
And this will be the test- if the correction is a healthy one, the bull is still in control. If not, the bear is. So let’s see how this plays out because your money is at stake in this game…
Here’s the benchmark S+P 500 (blue line is the average price of last 200 days):
After that big bounce, we soared higher, and it’s also encouraging to see the 200 day price line pointing up again.
The next correction is coming, and if the S+P can stay above 2,010 curing it, that would be ideal for the bull. Failing that, and perhaps more likely, the S+P needs to stay above that blue line at the 1,923 mark. This will be the big test and best prediction of what happens for the next year or so.
Our canary in the coalmine- the Russell 2000 index- has also bounced back but has not reached new highs- in fact, the trend is still somewhat down:
The author has an interest in the securities discussed in this article. Source of charts: stockcharts.com
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