Who's in charge? The bulls or the bears?
By Dian Vujovich
It’s easy to become addicted to what’s happening in the market. Watching every move of the indices and prices on stocks used to mean schlepping down to your local broker’s office and sitting in their gallery to literally watch the tape. Today only old geezers remember those days and all it takes to keep tuned in is turning on your TV, computer, iPad, smart phone, etc.
That said, the big question the moment-to-moment stock watchers seem to be focused on these days is whether or not the bull market is over. Date of that demise supposedly May 3.
Those who aren’t daily market watchers might ask, “What bull market?” remembering only too well that while the value of their stock holdings have improved, they aren’t at the levels they once were. Then there are the long-term seasoned investors who have learned to roll with the punches. In other words, big picture seers understand that markets always fluctuate.
In a recent Barron’s column titled, “Is the Bull Market Over?”, author Mark Hulbert looked at four different investor sentiment measures in hopes of gaining some insight into the connection—if any—between investor sentiment and market performance. Turns out, there is.
After looking at past bull-market tops, he writes: “I found that sentiment is remarkably correlated with the stock market
.In fact, in nearly half the cases studied, bullish sentiment peaked at almost the same time as the market — within fewer than five trading sessions before or after. It rarely has peaked more than a month or two before or after the top.”
Hulbert’s research lead him to conclude: ” A number of the sentiment indexes are, or very close to, flashing outright sell signals.”
If that sounds like bad news, it isn’t. If you’ve been a player in the market long enough you know there are a number of investment strategies to put into play in down times. And, that bulls make money, bears make money but pigs don’t.
Yesterday, I had lunch with Chris Kelly, owner of Barclay Breland Family Office in Jupiter, FL, and I asked him whether or not he thought the bull market was over.
“No,” he said confidently. “The markets always give some back before they go forward again.”
The charts show that there’s lots of truth to that.
But what about the not-so-distant future? Kelly said he expects the indices to be higher by the year’s end.
(Mark Hulbert’s full story is at http://tinyurl.com/3hkxos2 .)
To read more articles, please visit the column archive.