Get Set for the February Bull Run

As most experienced traders already know, February is the trigger-month for long bull runs in the stock market. It seems that whenever bulls finally decide to stare menacingly into the bear-faces of doom 'n gloom, the bears quickly cower and retreat back into the caves from whence they came. Bear hibernation period--at least 5 years.

Every bear market ends the same way. With the same "worst since this" and "worst since that" headlines blasting in the media for a few months--actually "one too many" months- which finally ignites the fury of the bull. Shorts, feeling arrogantly invincible, bashing everything in sight, go head-to-head with longs who have been feeling utterly frustrated and seriously beginning to doubt if the market will "ever go up again."

But, you see, the market always does go up again.

And it happens in February- usually after a good 6 months of "bottom-churning."

Then, the Big Money Players finally decide, "Honey, git the guns 'n wagons- we're headin' due north."

And, just like that, the markets reverse course, and head back up for the next 5 years. So, what finally causes the big money cowboys to "hitch up the wagons and head north?" To me, it's simple. The "short" ("put") trade gets old. And the long becomes the new short.

Since, media headlines always follow the trend (they don't create the trend), the headlines reverse course, as well. Which scare any remaining bears into seclusion--short-squeezed out of town.

This scenario has happened so many times over the years and years- that it's not even worth providing examples. This article is not for those who need to be educated in this regard. It's for those who have been here before. And you know who you are.

Which sectors stand to benefit most? All sectors. Anything remotely resembling DIA, QQQQ, SPY, XLF, XLE. Biotechs. Healthcare. You name it. It's going up.

So. Get your Valentine's Day hearts and wallets ready.

February is the time for the true running of the bulls.

Disclosure: The author has no positions in any of the stocks mentioned in this article

Comments

[herbert hoover:]

LOL

Jan 28 09:17 AM

[the ilster:]

total speculation.... great analysis.... NOT!

Jan 28 09:21 AM

[winnersdon'...:]

YOUR MOUTH TO GOD'S EARS!!

AMEN

Jan 28 09:44 AM

[Jim Hawthorne:]

Without analysis we are left with only our emotions as trading strategies, and emotions are best set aside for weddings and funerals...

Jan 28 09:56 AM

[Spudster:]

I sure hope there is some black humor in this article.

It is so well disguised that I can't see it.

'Take my wife, please!'

Jan 28 10:02 AM

[drbob66:]

Well, I honestly don't know if the author will be right or wrong...but if he really believed in his thesis, why doesn't he disclose any long positions?

Jan 28 10:22 AM

[prudentinve...:]

I don't remember any bull market beginning shortly after the publication of numerous articles, such as this, which predict it. They usually begin, sustainably, only several months after a so called "capitulation", which has yet to occur.

Jan 28 11:00 AM

[BigJake:]

prudentinvestor,

while i'm not bullish like this guy and I pretty much have no idea what is happening now or in the future, you say: "only several months after a so called "capitulation" "

Wasn't sept. oct. & nov. a capitulation? If it wasn't what is a capitulation?

Just FYI - I tend to agree with most people here, this guy is wishful thinking and there is more carnage to come, but I wanted your insight as to what would constitute a capitulation. Thanks!

Jan 28 11:38 AM

[Jason Rines...:]

We are either near bottom of a U shaped downturn or most likely a W shape with Energy, Health, Higher Ed and I.T. with most upward trend during a reinflation attempt.

Jan 28 01:32 PM

[Marcap:]

Unfortunately I think it is going to be a very long time before we see another substantial bull run. The Bull is old and tired, and there is far too much downward pressure on him to allow him to get up, and be energized enough to go after the bears. With the DOW currently at 8300, I think a retreat to near the 6000 level is far more likely than a gain to 10,000. Everyday we hear of more and more companies nearing bankruptcy, coupled with tens of 1000s of layoffs. And that is NOT what bull runs are made of.

Jan 28 03:10 PM

[Chris B:]

I usually require myself to provide a logical, data-supported, and defensible reason before I put tens of thousands of dollars at risk by buying, holding or selling a market position.

Metaphors about fighting animals don't make the grade.

Jan 28 04:20 PM

[Jake2:]

The only thing you can count on in February is more snow.
"Methinks the chart is humped like a camel. "
"No, sire. A bull. See you not the horns?"
"A bear it is then."

Jan 28 05:25 PM

[mpharbold1:]

This article is nothing more than wishful thinking. The problems this time are real - they are not made up by the media. The bankruptcies and the unemployment cannot be ignored. The terrible home sales and lethargic auto sales are real. And where does everthing come from these days - China. The depreciation of home values is real. My area of the country (South Central PA) is better than most and even it is getting bad. I understand being greedy when others are fearful, but this time the fear is justified. The gov't solution to the problem has been to print more money - more easy money for borrowing and that's what got us into trouble in the first place. Gov't is bigger than ever and just continues to grow while the tax base shrinks. I don't have the answers, but I recognize we are really in trouble this time.

Jan 28 07:34 PM

[scotty1560:]

Sell into any rally above 10k on the dow...
we'll see how good the new bull market looks in 12-18 months..
Hoping to see an equities boost from the stimulation packages.

the facts are tight credit, job losses, and declining salaries do nothing to create higher earnings. Bank closures and credit card defaults are in the cards.With foreclosures in the jumbo market probably 2+ years from peaking, we'll see how generous people are feeling.

Maybe Dorothy will appear , we can join her down the Yellow Brick Road,
and everybody has a happy ending. Personally, I think Judy (Dorothy) and
Frank Morgan (The Wiz) are on sabbatical for a few years. Don't forget
that trade imbalance with China, which has yet to be addressed.

Jan 28 10:41 PM

[koolsool:]

WOW, all the comments here are all the same. They all agree that there is no bull in the near future. They all agree with the mainstream media that the market is going lower. Hmmm, maybe it is time to buy long in Feb.

Jan 29 11:34 AM

[skwestorange:]

The author would be credible if he mentions what catalyst(s) is seen for the move upwards? On the other hand plenty of catalysts are visible to move the market down.

Jan 29 04:50 PM

[Did U Think...:]

You are going to lose your a$$ in Feb. I can pretty much guarantee that.

Jan 29 07:10 PM

[clomark:]

" why doesn't he disclose any long positions? "

Because the guy is willing to go long...with others money only...Talk about "conviction" lol

Jan 30 06:25 AM

[gtmcduffy@g...:]

Actually- on many things, I see eye-to-eye with Cramer. Aside from the fact that he's an obvious genius- most people fail to understand that he also has many agendas he has to juggle. But, I believe the real Cramer is all about getting the markets cleaned up and getting the government to get things right in terms of policy and speed and efficiency of implementation. The markets would go back up a lot quicker if Congress would get its act in gear on both levels- instead of continually defaulting to using "TV-ops" to placate their constituents.. The funny thing is: if the American taxpayer put Kudlow in charge of the Fed and Cramer in charge of the SEC- we'd see a whopper of a bull market in a hurry.


On Feb 05 10:15 AM Richard Collins; Claremont, CA wrote:

> GT McDuffy, You're light years ahead of Cramer and the other authors.
> Keep up the good work.
> I'm strong on the gaming stocks that are oversold such as MGM, WYNN,
> LVS AND BYD.
>
> Daniel Kowkabany

Feb 05 11:36 AM