Find new investment opportunities based on Market Sentiment Indicator. Manage watchlist risk with leading indicator of volatility See what influential analysts and investors are saying about stocks in your watchlist
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Find new investment opportunities based on Market Sentiment Indicator. Manage watchlist risk with leading indicator of volatility See what influential analysts and investors are saying about stocks in your watchlist
Most Trending
Most Trending
TrendspotteamFinding new investment opportunities based on Market Sentiment and Indicators. Manage portfolio risk with leading indicator of volatility See what influential analysts and investors are saying about stocks in your watchlist
The S&P 500 index closed at a level of 4,294 points, leaving the so-called "bear market" territory after a year in it. The formal definition of a bear market is when a major index is down more than 20% from its most recent high. A drop of more than 10% from the peak is called a correction.
It seems that now there is room for optimism in the markets, because usually, a bear market on Wall Street is followed by a bull market. A look at the Dow Jones market data, which has been measured since 1929, and which examines performance after the index's previous exits from bear markets, mostly conveys optimism. On average, one month after exiting a bear market, the S&P 500 rises by 1.8%. Half a year after the exit from the bearish territory, an increase of 7.9% can already be predicted, and a year after the exit there is an increase of 9.3%.
History shows that a rising trend in the index after a bear market may last for many years. Since 1932, bull markets have typically lasted about five years on average, and the S&P 500 has risen an average of about 180% during each bull market.
But there are also exceptional situations, for example, between the years 2009 and 2020 the S&P 500 rose by more than 400%. Even before that, the bull market that started in 2002 ended five years later with an increase of over 100%, and the one that started in 1990 lasted for a decade, yielding investors over 400%.
On the other hand, there are also those who are afraid of the positive sentiment, and believe that we have not yet reached the stage of the bull market.
The explanation for this lies in the economic data that show that inflation is still very high, at 4.9% at an annual rate, well above the Federal Reserve's target of 2%. According to the Morningstar company, the market does seem to be in good shape, and it is having a positive year, but on a closer look you can see a slightly less rosy picture. The gains in the stock market are highly concentrated, meaning they are not evenly distributed, and several stocks tilt the trend upwards.
The last few years have been characterized by the dominance of technology stocks, and recently the hold of high-tech has tightened even more. Eight of the largest technology and growth companies Alphabet, Amazon, Apple, Meta, Microsoft, Netflix, Tesla and Nvidia - now account for 30% of the total market value of the S&P 500 index, after at the beginning of the year they accounted for 22% of the value of the S&P500.
A market is considered healthier when more stocks rise together and history shows that broad bullish situations are often more sustainable. The bull market is really a matter of 20% of the lows we saw and if you analyze it, you see that it is a very sharp increase in a number of technology stocks, led by a limited number of companies.
As a result of the corona virus, a lot of money flowed into the economies of the world, and now the markets need to be compensated for all the money they have been swimming in, and there is a high probability that it will deteriorate into a recession. There is also inflation of the stock market, and that there is a lot of money from the corona in this market as well. The AI culture is gaining momentum, and we see that every time the word is added to a product, the market immediately jumps on the stock.
There seems to be a new hype pushing forward and pulling tech companies that were a little stuck behind it. The fear of an impending recession still exists, and one should look very suspiciously at these increases, but this feeling does not exist in the large technology companies.
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Please note that the article should not be considered as investment advice or marketing, and it does not take into account the personal data and requirements of any individual. It is not a substitute for the reader's own judgment, and it should not be considered as advice or recommendation for buying or selling any securities or financial products.
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by StocksRunner including any of their affiliates ("TS").
This information is provided for illustrative purposes only. You should not rely on any advice and/or information contained in this website and before making any investment decision. we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by StocksRunner including any of their affiliates ("TS").
This information is provided for illustrative purposes only. You should not rely on any advice and/or information contained in this website and before making any investment decision. we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.
