Bull Market Enters Its Eight Year, Not!!!

The S&P 500 bottomed at 666 on March 9,2009 this much is true. To claim that “the stock market” has been in a bull market since then is totally flawed thinking.

First of all, the S&P 500 is not the entire stock market. Last time I checked our database had 6,680 stocks as of last Friday. Therefore, the S&P 500 is less than 10% of that number. Granted it is a huge percentage of the market capitalization of the overall stock market.

Since March of 2009, there have been two bear markets and we are living through the second such one right now. The Russell 2000 which is a broader measure of the stock market lost -26.40% from 6/23/15 to 2/11/16. Then in 2011, it lost -25.04% from 4/29/11 to 10/4/11.

Millions of Americans own stock in their 401K on the other 6,180 stocks that are not in the S&P 500. So if the broader index fell into a bear market, then those that were invested in company stock via a 401K saw a big hit to their net worth not once but twice since 2009. No wonder Americans are pissed off at their inability to recover from 2007-2009.

The classic definition of a bear market is a drop of -20% over a minimum of two months on either the Dow Jones Industrial Average or S&P 500. Funny how the other indexes do not matter in determining if investors lived through a bear market. Clearly, an attempt to put lipstick on a pig.

During the above bear markets on the Russell 2000, the S&P 500 fell -13.96% in 2015/2015 and -18.61% on a daily closing basis  during 2011. If we looked at 2011 on an intraday high to intraday low, indeed the S&P 500 was in a bear market in 2011 as it fell -21.58% using intraday high and lows. Someone clearly is trying to keep the myth of buy and hold investing alive.

Tomorrow we will look at the rebound from 2/11 and determine if in fact this is for real or just a garbage rally.