A New Bull Market?

As we’ve discussed in the past, investors tend to use a 20% rise/decline from a market low/high to signal the start of a new bull/bear market. 🧭

While that method certainly has its downsides, it does tend to get a lot of attention. And right now, with the Nasdaq 100 rising over 20% from its October lows, investors are once again asking whether a new bull market has begun.

Now, skeptics will point to previous rallies, like in August, that reached 20% but ultimately continued lower. But the believers will point out that the current market environment is different.

For example, the Nasdaq 100’s 200-day moving average, often used to indicate its long-term trend, was falling in August. But since late last year, it’s flattened out and begun rising again. 📈

They suggest this indicates a much more supportive environment for stocks today than before. And as a result, they’re giving this signal more weight than they had in the past. ⚖️

Whether this is the start of a new bull market is a question being asked by investors all over the globe. And if prices continue to rise in the face of constant bad news, some hypothesize that the fear of missing out (FOMO) could take hold and push the market even higher. 😨

Only time will tell which side of the argument is correct. But the current environment definitely has some folks changing their tune. Just ask Michael Burry, who tweeted:

Guess this market has even the brightest investors unsure of what’s next. 🤷

As always, that’s the conversation happening today. We’ll leave it to you to analyze what you think is coming next. 

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First up, SVB Financial Group, the parent company of Silicon Valley Bank, has filed for Chapter 11 bankruptcy protection. The company says this process will allow it to evaluate strategic alternatives for its unaffected businesses and assets, including SVB Capital and SVB Securities, which remain operational. Also, note that Silicon Valley Bank was not included because it was taken over by the Federal Deposit Insurance Corporation (FDIC) last week. ⚖️

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First off, the VIX is based on the implied volatility of S&P 500 Index options. Using near-term expiration dates, it generates a 30-day forward projection of volatility. As a result, investors use the VIX to measure the level of “risk” or “Fear” the market is feeling. 📝

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