What a Bull Market Looks Like

"Any bull market covers a multitude of sins, so there may be all sorts of problems with the current system that we won't see until the bear market comes."  -Ron Chernow

I started my weekly ETF screen a bit early this week to see how things were playing out before the weekend.  I had a feeling it might look fairly rosy, but it was a little over the top rosy this time.

On the list of ETFs making 65-day highs this week, you had pretty much every global asset.  US stocks, global stocks, EM, China, Taiwan, Poland, Italy, Sweden, large caps, small caps, industrials, insurance, even lithium all at new highs.

I'll include a chart of Sweden, as I've had few opportunities to do so.  

 Source: stockcharts.com

Source: stockcharts.com

There are a great many charts that look like some variation of the one above.  So what does that mean?  First thing, it means we're in a bull market.  Undeniably.

The second thing is it means I'm getting very nervous.  Why you may ask?  Because lots of things look very good.  

Even the one ETF on the "new lows" list actually looks like it could bounce here, with an oversold condition and a positive candle configuration.

 Source: stockcharts.com

Source: stockcharts.com

Don't get me wrong, I think there are much more attractive charts out there.  But when the one ETF on the new lows list doesn't scare me, that's a problem.

You see, I started my financial career in June of 2000.  Much of my career has been spent in a secular bear market, especially during my early formative days of investing.

Don’t confuse brains with a bull market.
— Humphrey Neill

I've often noted when people get started in the markets, and how that tends to affect their decision making over the course of their careers.

Compare that to anyone that has started investing in the last seven years or so, having experienced nothing but a cyclical bull market.  As contrarian investor Humphrey Neill said, "Don't confuse brains with a bull market."

So where does that leave me?  I'm bullish.  As I've written recently on Investopedia and stockcharts.com, I'll remain bullish as long as we see higher highs and higher lows on the major indexes.  

But when I sense all the ships rising with the tide, I can't help but feel just a little bit nervous.

RR#6,
Dave

Disclaimer: This blog is for educational purposes only, and should not be construed as financial advice.  Please see the Disclaimer page for full details.