Sure, this bull market is getting old. The thing is, on a technical basis, there’s nothing pointing to its demise. Brian Shannon of AlphaTrends.net and a member of Yahoo Finance's contributor network stopped by with some charts to prove it.
Key for Shannon is the fact that “the highs are higher than they were six months ago, the lows are higher as well so we have that pattern. Higher highs and higher lows and we just have to monitor price action, manage risk on an individual stock basis.”
You can see Shannon’s point in the S&P 500 chart to the left.
He also notes that this pattern holds for the most recent dip we’ve experienced. “We maintain that pattern again of holding above that trend line, we haven’t broken the lower low and we also have a rising 100-day moving average which was just touched and that is where the buyers showed up. We’re still in a healthy uptrend.”
How long can it all last? That’s of course the key question and we’ll only really know in hindsight. That doesn’t mean there’s not a good way to play the market we’ve got.
As Shannon notes this market is innocent until proven guilty and so rather than hate the most hated bull market in recent memory, instead he says “at these key technical levels then you have to reduce your positions and listen to the what market tells you.”
- Brian Shannon
- bull market