The Technicians Are Extremely Bullish
While the technicians continue to see downtrends and consolidations, the market is now headed higher for the intermediate term. By the time the technicians have their price “confirmation” the rally will be mostly over and it will be time to start taking profits – “The Lows Of The Year Are In”, Top Gun Financial, July 28
A few weeks ago I said that the lows for the year were in. At the time it was a contrarian call. However – as the stock market has risen sharply since then – many are jumping on board. In fact, some are claiming that the bear market is over and a new bull market has begun.
For example, the popular Twitter technicians Ryan Detrick and JC Parets both wrote extremely bullish tweets Monday. Detrick pointed out that on Friday 90% of the S&P’s components were above their 50 Day Moving Average – an occurrence that has only taken place in bull markets over the last twenty years. JC Parets created a series of charts showing that bull markets often stall in their second year after a big first year. The implication is that the bull market from the COVID lows is still in play. The same thing happened four months ago as the technicians were sucked in near the top by the strong price action of the last bear market rally.