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What Me, Worry?

By Gary Antonacci

 

This past month the U.S. stock market again made new highs. The backing and filling action since making new highs has brought out the usual talk about a potential market top.  However, when I was young I learned that bull markets are defined as a series of higher highs and higher lows.  Here is a chart of the S&P 500 since the current bull market began in 2009:

 

 

This looks to me like higher highs and higher lows with no sign of a change in the primary trend of the market. Charles H. Dow said the existing trend of the market should be given the benefit of the doubt, despite “market noise," until there is a confirmed breakdown of the primary trend. A confirmed breakdown would require that both the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) fall below their prior lows. While this has ... Log in or subscribe to continue reading.


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