Overtime
The bull case
Good morning,
Brown Technical Insights has been net cautious on this market, but after making the case for a recessionary bear market two weeks ago, it’s only fair we give the bull case some airtime.
One benefit of this analysis is that it forces me to play devil’s advocate with my own opinion. Another benefit for you all is that I just provide the information, and you can make your own judgment about which case is stronger.
I’ll be honest, I expected to struggle some here, but the report got easier thanks to Monday’s rally.
Today, I’ll break down just what was, and wasn’t, significant about the move, as well as the holistic bull case from a short and long-term perspective.
The long-term “trend” is intact
The S&P 500’s longer-term moving averages are still rising
A less noisy way to gauge trends is by following the slope of key moving averages, rather than whether prices are above or below them. While the six-month is getting close to flat, currently the six and 12-month moving averages of the S&P 500 are still rising.
It is a secular bull market until proven otherwise
The even-longer-term trend suggests this market deserves the benefit of the doubt, with the S&P 500 more than 20% above its 200-week moving average. This is a secular bull market that began in 2013, and there is little evidence that is under threat.
