Monday , 4 December 2023

There’s Evidence – Plenty of It – That the Bear Is No Longer Hibernating. Here’s Why

The health of a market is best assessed along three vectors: fundamentals, technicals (price action) andinvesting-hold-buy-sell sentiment [and this is what each is saying about the health of the markets these days.]

The above are edited excerpts from an article* by in an article* posted on with the title How Do We Know The Bull Market Isn’t Over?.

The following article is presented by Lorimer Wilson, editor of (Your Key to Making Money!) (A site for sore eyes and inquisitive minds) and the FREE Market Intelligence Report newsletter (register here; sample here) and has been edited, abridged and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.

The article goes on to say in further edited excerpts:

What the Technicals/Price Action Are Saying

“On the technicals / price action side, there can be no doubt of grave trouble. The most risk-sensitive portion of the market (tech and small caps) is already in bear market territory, as the chart below shows (hat tip to Business Insider):

(click to enlarge)

What the Fundamentals Are Saying

The fundamentals side looks equally dodgy. Earnings for the Dow industrials are no great shakes and, in fact, earnings season overall looks surprisingly weak. There are strong arguments we are coasting on the fumes of “magic pixie dust” sprinkled around by Ben Bernanke, and that the transition to Janet Yellen is coinciding with the death of the OCBN…There is a logical argument that the stellar upside of 2013 represented a sort of last hurrah for faith in central banks to keep these markets elevated in a time of permanent malaise.

What Is Sentiment Saying?

Consider that:

  • Janet Yellen has shifted the conversation from “ZIRP as far as the eye can see” to when interest rates will rise.
  • Every observed uptick of U.S. economic strength is now linked, psychologically, to reminders of stimulus withdrawal.
  • Record-level corporate profit margins, which have done a great deal to help keep equities aloft, are observed (correctly, we believe) to be the most mean-reverting data series in all of finance.

Are we declaring with certainty that “the bull market is over?” No, we aren’t countering the statement directly. We do not declare with certainty “the bull market is over.” At the same time, however, stating flatly that the bull market is NOT over seems a curious stretch. Why make that casual assumption with an implied high degree of statistical confidence? What justifies such confidence? A vague faith in inertia? Seems a little bit woolly, no?

…Our focus is not on being right, but making money. In general terms, a trader should be as detached from the actual outcome of events as a bookie making a point spread. The process itself, if good, generates positive return over a meaningful number of statistical trials and our process is tapping us on the shoulder as of this writing, saying “Hey! No guarantees… but this bad boy could be rolling over in a big, long-term way”…

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We can’t help but wonder, in a devil’s advocate sort of way, if a statement such as “the bull market is not over” is not meant to be a sort of comforting palliative – a glass of warm milk before bed for those who yearn in their hearts to be long and stay long because, while one cannot make a slam dunk case the bull has been slain, there is certainly evidence – plenty of it – that the bear is no longer hibernating.”

Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.

** (© 2014 Seeking Alpha )

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One comment

  1. Another title for this article might be:

    Denial by any other name is still DENIAL