Bull or Bear? – The Huge Image



There appears to be a debate happening at the moment between economists and market technicians (!?) as as to if we’re in a bull or bear market. I’ve outlined markets previously (see this) so those that need to delve deeper can.

No matter the place fall within the bull/bear spectrum – I’ve been constructive right here – permit me to level out some bullish gadgets you’ll have ignored (I’ll focus on bearish issues subsequent week).

Simply Red: We start by noting there was nowhere to cover in 2022: final 12 months noticed losses for shares and bonds, with Bonds off 12.9%, the S&P 50 Index down 19.7%, the Russell 2000 off 21.7%, and the Nasdaq 100 down 33.4%.

Risk Appetite: Fund Managers surveyed by Financial institution America Merrill Lynch (BAML) are as destructive about as they ever get. It’s uncommon to see shares as hated as they have been in the midst of 2008-09, however that may be a very contrarian sign. Many of the bottoms sign wonderful fairness entry factors.


Getting Better: Nasdaq was the massive loser in 2022, however (as Paul sang) it’s getting higher on a regular basis. The chart up prime doesn’t do justice to how a lot many of those excessive fliers have recovered. These stock gains because the bear market lows present some huge positive factors:

Huge Tech Gainers
Netflix:  +99%
Roblox:  +66%
Coinbase:  +65%
Nvidia:  +62%
Fb:  +52%
Uber:  +47%
Tesla:  +26%
Airbnb:  +24%

The Remainder of FAANG:
Amazon:  +18%
Microsoft:  +11%
Apple:  +10%
Google:  +10%

Recall how far many of those fell throughout the worst of their 2022 drawdowns…

Lose Weight: BAML notes that “Traders are most underweight on US shares since 2005;” When retail buyers are underinvested in shares following a down 12 months in markets, it has traditionally been a long-term bullish set-up in equities.

Breakaway: For under the 25th time since World Battle II (a mean of as soon as each 3 1/2 years), the Dow Jones Industrials registered what technician Walter Deemer calls “breakaway momentum” (or “breadth thrust”). This typically alerts a brand new bull market (or a brand new intermediate upleg inside a bull market).


It’s noteworthy that a lot of the bullish alerts are market-based or technical in nature. The bearish alerts I’m gathering for subsequent week appear to be primarily elementary or financial in nature…



Observations to Start 2023 (January 3, 2023)

Groping for a Bottom (October 14, 2022)


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