Maybe it's because I watched Zoolander recently, but I have to be honest, I feel like I'm taking crazy pills right now. I keep reading article after article that claims we're in a sideways market as if it's an irrefutable fact, and yet when I pull charts like the one below, I see a textbook bull market (general uptrend with regular corrections).
Consider the following:
The chart above is the SPDR S&P 500 ETF (NYSEARCA:SPY) for the last four years. As you might notice from the lines I marked, during the last three years we have hit 52 week peaks every April, given back some of those previous gains over the summer, and then resumed the bullish trend by mid august. Now I have never been a strong disciple of technical analysis, and it's always a mistake to assume the past guarantees the future, but I do think it's important every once in a while to step back from the present noise and consider a grander picture. And the picture this chart paints for me is a three year bull market.
Let me repeat that, a BULL market, not a sideways market. Now I know that technical analysis often leaves quite a bit of leeway for dissenting opinions, but if I were to ask which trend the SPY chart above best resembles on the diagram below are there really individuals out there who would say sideways? Since the S&P bottomed in March of 2009, we have seen it nearly double in value (700 to 1350), which to me could not be a more blatant uptrend.
Perhaps at this point you're yelling "Semantics! Who cares? How is this supposed to help me make money if you're only discussing the past?" Well, my friend, if you will direct your attention back to the SPY chart from earlier you will notice that I marked red lines for the summer peaks and black lines for the end-of-summer rallies that followed. You also might notice that I haven't marked a black line yet for this summer.
In the days ahead, I hope to make a case for the bull market continuing, and with a little luck, we will soon see another black line. But I first felt it was necessary to accurately define the past we have come from before attempting to predict where we will be in the future. So for today, let's just set the record straight.
The last three years have been bull market years, and even if we all head back into a recession this year or the next that still would not be a sideways market, that'd be a bear market. If you disagree, feel free to make an attempt at hot, new 'Magnum' perspective that contradicts my thesis in the comments below. But until I see it, I think all you sideways fans only have one look, and frankly it's a look I'm quite tired of.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.