There's a Bull Lurking

Quietly, there has been a bull sneaking around the markets over the past three weeks. The S&P 500 index (.INX) technically began a new uptrend on November 20. By climbing 20% from its low on the 8th to the 20th, it became a new bull market by definition.

The shortest bull markets for the S&P lasted only 24 days. With today, we are up to 22. To cancel this uptrend, the S&P would have to drop by 20% from its high. So until it hits 727.80 we’ll remain in an uptrend.

Interestingly enough, some of the biggest movers supporting this drive have been from the consumer discretionary spending sector. Representing half of the top ten: Lennar (LEN), General Motors (GM), Liz Claiborne (LIZ), Jones Apparel (JNY) and DR Horton (DHI) have all seen significant gains.

While GM can be explained by optimism over a potential bailout, the others can’t be explained away so easily. This especially since consumer spending is down and - for the first time ever - household debt dropped.

Surprisingly, consumers are spending more at department stores. The question is if this has been due to promotions and discounts, and how much the additional spending has impacted the bottom line. If the discounts have sacrificed profits, we’ll see these S&P members fall.

Comments

[herbert hoover:]

The Treasury jumps in and buys stock (Shhhhhh - it's supposed to be a secret) everytime the news is bad. By Januart 20th, 2009 Hank Paulson may end up owning the entire stock market

2008 Dec 14 09:01 AM

[investor88:]

Accept lurking bull unless proven otherwise. Trade with stop loss.

2008 Dec 14 09:16 AM

[Quickdraw:]

Yep ... there certainly is a lot of bull lurking in this one.

2008 Dec 14 09:47 AM

[Paul Price:]

Oxford Club recommendations = pump and dump.

2008 Dec 14 12:09 PM

[Bullfighter:]

That's a bunch of crap. So we bounced off a prominent low. A true bull market is seen when the 13 week EMA crosses the 34 week ema.

Where's the 34 ? 1100

Where's the 13? 977

We have been on a weekly sell ever since the 13 EMA crossed the 34 ema in December 2008.

Percentages don't mean a thing.

Not once has the 13 week ema crossed back through the 34 week ema since we began to slide.

2008 Dec 14 12:48 PM

[User 319344:]

Advice from a old timer ....Number .One you have to learn that charter has value....Two you need business with strength (cash) not debt for a real recovery ...And three you need a nation not a global community with savings not debt...your market today has none of these...So you will have no recovery...only extended misery in you life...So pump and dump away...e trade the highs..and click away...The Internet generation doesn't know how to work...But you may have to....You will know there is a turn around coming when you care less about your blackberry and the co2 in the air and have the back bone to destroy(kill and eliminate) not legitimatize your enemy...Until then you will be stuck in a spiral of downward despair...

2008 Dec 14 12:58 PM

[Scalpulator:]

I didn't realize that a bull could be born from short covering...

2008 Dec 14 04:53 PM

[eyek:]

its nothing but a bear market santa claus rally

2008 Dec 14 09:00 PM

[tinman:]

[the sound of dead cats bouncing]

2008 Dec 15 07:40 AM

[Big-P:]

Tinman has it right.

2008 Dec 16 03:29 AM