By: Tom Gentile
on June 9th, 2023
The S&P 500 closed above a price level Thursday that signified its exit from the longest bear market since 1948. For Market Bulls this is good news and probably somewhat of a relief. For market bears it isn’t the most welcome situation.
The S&P 500 had been in bear-market territory for 248 trading days. The longest bear market prior to this one was 484 trading days that ended on May 15, 1948.
The key thing the markets need now is to continue to follow through to the upside.
If history I any indication as to what to expect from here…
Anticipate a Sustained Bull Market
According to Dow Jones Market Data, at median and average performance following past bear-market exits, based on data stretching back to 1929, is largely positive for periods from one month to a year.
Should things work out in a similar fashion this time, based on this data, we would be leaning more bullish than bearish in our option trading research.
Per Sam Stovall, chief investment strategist at CFRA, of the 14 bear markets since WWII, only two — 2000-’02 and 2007-’09 –– produced exits that saw the S&P 500 quickly slump back into a bear market by declining more than 20%. (data obtained from marketwatch.com).
Morning Reports Lists
The NASDAQ appears to be ending up its 7th positive week in a row of showing a gain. Should that happen it will be the longest streak since November of 2019.
The Dow Jones Industrial Average is possibly going to end this week positive, which would be the 2nd week in a row its accomplished that.
Also, the NASDAQ hit an all-time high on an intraday basis today.
When looking over the Morning Reports listed in Figure 2, maybe you start analyzing and discussing with your broker stocks that are considered NASDAQ stocks, those with ticker symbols 4 letters or more.
App: Toms Option Tools
Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.
Other times I will have other charts may work to amplify my educational points.
Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.
Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.
Stock and options trading has large potential rewards, but also large potential risk.
You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.
This is neither an offer to buy/sell/ or recommend a particular stock or option.
Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.
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