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New Bull Market Signal – Or Extended Bear Rally Ahead?

sp-monthly

On a lazy Sunday afternoon I thought I’d scan the market to see what it has to say. One chart I review periodically is the S&P Monthly Chart compared to the 10-month moving average. You can see above that over the past 22 years (and quite honestly much longer) whenever the monthly chart crosses the 10-month moving average, you are in for an extended move in a new direction (there are periodic exceptions, but none since 1998).

The market is rallying strong right now as under-invested managers and individuals want to get in on the beginning of the next bull market. The liquidity flowing into the market will drive it higher for awhile – but these people are skittish. Any normal pullback, if not bought, will likely lead to these same people pulling money out of the market.

We are in a very interesting time and continued success will require paying close attention to fundamentals and technicals, particularly volume and money flows.

Enjoy your Sunday!

Mark