Investors have been fooled by multiple failed rallies in 2022, but a growing number of bulls contend this time really is different.
The Nasdaq and Nasdaq 100, for example, have both spiked by more than 20 per cent, which some see as confirmation that a new bull market has begun. That’s debatable, given the volatility of the tech-heavy Nasdaq indices. The Nasdaq enjoyed a number of even large rallies during the 2000-2002 and the 2007-2009 bear markets, only for deeper falls to follow.
Still, the extent of the recent strength is notable. More than 80 per cent of S&P 500 stocks traded above their 50-day moving average last week, notes Carson Group’s Ryan Detrick. Historically, says Detrick, thrusts of this magnitude were indicative of continued strength.
Indeed, the current percentage is the highest since spring 2021 and is far higher than anything seen during 2022′s aforementioned failed rallies.
Bellringing for 65 years: ‘It’s great exercise but now that I’m 90 I only ring the lighter ones’
Eli Hewson of Inhaler: ‘There’s so much nepotism in every facet of life’
Mark O’Connell: The giant machine for plagiarism is now complaining that it has been plagiarised. Oh, the irony
A year on from having a stroke, Feargal Logan’s life has changed but he counts himself very lucky
Investors’ increasing optimism can be seen in the decline of the Vix, Wall Street’s so-called fear index. It is now below its historical average, last week falling below 20 for the first time in almost four months. Importantly, the Vix has been below 30 for more than 50 consecutive days – its longest streak of 2022, and another indicator that this rally is a different beast to the short-lived affairs that petered out earlier this year.
