[Market Outlook] The S&P 500 Enters a New Bull Market!

But There Are Signs It May Be Getting Stretched [Company Logo] The S&P 500 Enters a New Bull Market! But There Are Signs It May Be Getting Stretched By Donn Goodman and Keith Schneider [image] Happy weekend Gaugers. Hope you had yet another positive investing week. Thanks for visiting with us for a few minutes. Let’s embark on the Outlook together. The markets continue to grind higher, albeit a bit quieter. On Friday, stocks faded into the close but still eked out a small (0.1%) gain for the week. See chart below: [image] The good news, as you can tell from the headline above, is that the S&P 500 entered a NEW BULL Market from the October 2022 lows. See chart below: [image] The End of the Bear Market: Besides a 20% rise from the lows, there are signs that we are likely at the end of the “bear” market. We have posted a number of charts supporting this over the past few weeks. We have also shared positive prognostications from people like Ryan Detrick (of the Carson Group), that provide statistical evidence of what happens when returns have produced positive returns at certain points beginning and continuing through the first half of the year. Please [review our previous Market Outlooks](=) to revisit these forecasts. Many of these charts, like the one below, show what might occur after the 20% rise from the previous market bottom. [image] PLEASE pay attention to the periods above including 1974 (stagflation) and 2002 (reemergence of the bear) when technology stocks continued their decline from 2000-2002. These two periods resemble in some fashion, the dynamics playing out in the current market environment. Managing Director of Banc of America Savita Subramanian (Barron’s top 100 most influential women in Finance) states, “after crossing the +20% mark from the bottom, the S&P 500 continued to rise over the next 12 months 92% of the time (vs. 9% average overall) based on data going back to the 1950’s.” I loved the below cartoon I came upon this weekend. It sums up what the 20% off the bottom means, the enthusiasm for AI driving the market’s exuberance as well as the expectation that all the problems of the economy are now going to somehow disappear NOT. [image] According to AAII (American Association of Individual Investors), bulls outnumber bears for the first time in 18 months. (this is a positive sign) [image] What Sectors are fueling the returns in 2023? The following chart illustrates what sectors of the S&P 500 are providing the most returns so far in 2023. [image] The number of stocks that are below their 50, 100 & 200-day simple moving averages (SMA) is improving. See chart below: [image] As expected, the Information Technology (XLK), Consumer Discretionary (XLY) and Communication Services (XLC) have more than 50% of their stocks above these important moving averages and are still leading the markets higher. (we are rotating into one of these 3 sectors in one of our investment strategies on Monday. If you are a subscriber, look closely for this allocation and if you are not but want more information contact [Rob@MarketGauge.com](, or [schedule a call with him here](), and he will assist you) Leadership is broadening out. We have written on numerous occasions (as has Mish through her Mish’s Daily, [click here to review](), that this has been a very narrow market. I am confident that you have read your fair share of media concern that this rally has been only concentrated in the top 7-15 mega cap stocks driving the index. If you haven’t had a chance to read last week’s Market Outlook, [go here to review our take on the narrow leadership](). The good news, thus far, is that leadership is broadening out, and market capitalization is beginning to rotate. See chart below: [image] Non-participants so far this year, small and midcap stocks began a snapback rally this past week. It was a good week for both areas of the market. A good sign. See charts below: [image] [image] [image] Some of the factors that could be helping to drive the markets higher. Use the links below to continue reading about additional economic indicators, sentiment, non-interest rate related Federal Reserve actions, and the Big View analysis and video by Keith. [Click here to continue to the FREE analysis and video.]() [Click here to continue to the PREMIUM analysis and video](=). Best wishes for your trading, Donn Goodman CMO, Market Gauge Asset Management Keith Schneider CEO, MarketGauge P.S. When you’re ready, here are 3 free ways we can help you reach your trading goals… - [Book a call with our Chief Strategy Consultant](), Rob Quinn. 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