Gold Silver Reports – IDENTIFYING IT RIGHT There are some key drivers for a bull bear market. Sometimes, the order may change.
Depending on the priorities, it’s easy to distinguish whether it’s a bear or bull market, states Barry Ritholtz
What’s driving the stock-market rally? How you answer that question determines if you are a bull or a bear. Here are a few factors that are key drivers of the bull market:
GLOBAL ECONOMIC EXPANSION
After a decade since the Great Depression, we are now getting to the point where emergency policies are being removed.Monetary policy is being normalised; growth, employment and wages are mostly solid.
EARNINGS
Say what you will about everything else, corporate earn ings have improved in the US and are recovering in emerging markets, Europe and Japan. Rising earnings typically lead to rising equity prices.
SENTIMENT
For a long time this bull market was the most hated rally in Wall Street history. That is no longer the case. Individual investors are back, which can lead to higher PoE ratios, which helps sustain a bull rally.
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TERRIBLE HEADLINES AND NEWS
News is mostly irrelevant for the follow ing reasons. It’s is old; very little is sur prising. Headline risk still exists, but it always exists -it’s not specific to this rally. People are predisposed to notice bad news; good news is mostly ignored.
RECOVERY FROM CREDIT CRISIS
Traders should stop using the usual recovery from recessions as a frame of reference.Instead, understand that recoveries from deep financial crisesare quantitatively and qualitatively different.
MONETARY POLICY
Central bank asset purchases and zero interests are ending -yet markets are still rising. This refutes the claim that the rally is exclusively the result of actions by the Federal Reserve.
CAPITULATION
Markets that get cut in half create a reset that tees up the next secular market. It may be brutal for bulls while it’s happening, but once it has been overcome, it provides an underlying support for future gains.
VALUATION
US stocks are either expensive or very expensive. But that doesn’t mean the market stops going higher -it only means we are borrowing from the future. Investors should lower their expectations for future returns. – Neal Bhai Reports
