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This bull market may be the longest, but it's not the strongest

Heidi Chung

The longest bull market on record turned 10 years old Saturday. On March 9, 2009, the S&P 500 (^GSPC) bottomed at closing low of 676.53 and has been on a tear ever since — rallying more than 300%.

Despite the current geopolitical landscape and growing global threats, the bull run has even more room to run, according to LPL Financial.

“We believe the 10-year-old bull market has quite a bit left in its tank,” John Lynch, LPL Financial’s chief investment strategist, wrote in a note on Monday.

Lynch pointed out that although this current bull market is the longest in terms of duration, it is by no means the strongest.

“Stock prices in the 1990s bull market increased by 417% at the peak, more than 100 percentage points above the current bull market. This comparison is reassuring, as it shows this bull might not be as extended as many think,” Lynch explained.

According to Lynch, the underlying fundamental backdrop is positive and could thus push the market higher from here.

“We’re looking for earnings to potentially surprise to the upside in 2019, and we think stock valuations are still attractive relative to bonds despite this year’s gains,” Lynch argued.

Market breadth remains strong. (LPL Research, FactSet)
Market breadth remains strong. (LPL Research, FactSet)

From a technical perspective, market breadth remains strong when looking at the advance/decline (A/D) lines, according to Lynch.

“One sign that market breadth continues to suggest higher overall equity prices is that various A/D lines have broken out to new all-time highs this month,” he said.

The A/D line is a technical indicator that helps investors better gauge the overall market sentiment. It charts the difference between the stocks that are rising or falling in a given day.

“With that indicator making new highs currently, new highs in equity markets might not be too far away,” Lynch concluded.

It won’t be an easy journey for the market, according to Lynch. “But we continue to expect eventual new highs in equity markets and reiterate our fair value target of 3,000 for the S&P 500.”

NOTE: A version of this story was published on March 7, 2019.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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