As far as I am concerned, a bull market is a trend that carries the averages up at least 60% from their lows and that lasts at least 18 months. Janet has asked if I think this is a bull market.
Yes, I do. But I remind you that I completely missed the panic of 2008. And I thought in my 2009 stock market forecast that a new bull market started from the November low in the s&P at 742.
That said, I offer the following observations. First, at the March 6 low of 666 the S&P had dropped 58% from its 2007 high. Adjusted for inflation, the drop from the year 2000 high amounted to about 66%. These are BIG numbers. Unless you expect a replay of 1929-32, and I do not, then no bear market during the past 100 years in the U.S. has been as deep.
At the March 6 low I can only describe public sentiment and professional sentiment as depressed and hopeless. I base this assessment on 40 years of observing the investment scene closely and systematically. Of course, things can always get worse - and people who have believed that they will have been right over the past 12 months.
But the situation is so extreme that I think that even a return to just mild pessimism would be enough to produce a bull market in the averages. A 65% move up from the March low would put the S&P at the 1100 level, not all that far away.
So I think we are seeing the first stage of a new bull market. I think it will be a reluctant bull. I foresee it developing along the lines I described in my 2009 forecast. I shall have more to say on this subject in another post.