Is the S&P 500 Bear Market Over?
By definition, a bear market is when price drops 20% or more from its recent or all time highs. So for the S&P 500 ticker /ES one could say that technically speaking the bear market is over because price is now approximately 15% off the all time high set back in October 2021.
But is the recent run up simply a "Bear Market Rally" or are the bulls firmly back in charge gunning for new all time highs?
Simply stated, nobody knows for sure despite the so called experts, many self-proclaimed, who try to grab headlines by making "predictions" about future doom and gloom or euphoric market conditions.
One thing for sure is that for over a year now the market has provided great conditions for traders! True traders really aren't bulls or bears and typically do best when there's two sided price action (like now) and can anticipate (not predict) bi-directional levels of interest and trade with prudent risk management principles.
Now that's what we're talking about!
Because that's exactly what we have now... In reviewing the higher time frame monthly chart for /ES one can see the two sided price action and statistically oriented levels in both directions.
Technically speaking, the S&P could reasonably surpass 5000 or visit pre-pandemic levels below 3000. But don't confuse that statement with a prediction.
Historically speaking though as interest rates rise the markets have moved down. That's not to say it's guaranteed to happen but you know what they say about history having a tendency to repeat itself.
Relatively speaking, interest rates are still near historic lows even with the rapid ascent over the past year.
Conversely, inflation rates once described as "transitory" have been around historic highs.
This is not meant to be an economic or monetary policy debate because unless you sit on the FOMC what we think or say will have little impact on the markets.
Ultimately, conditions couldn't be better for traders who anticipate projected price paths and trade accordingly.
If you'd like to learn more about how to anticipate projected price paths using price action technical analysis you can learn more about our Price Action Mastery certification course.
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