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Market Statistics

No Bull Market Yet

Photo by Markus Spiske

There is no bull market yet, and mainstream media announcements are premature. I propose a more robust metric for deciding when a new bull market starts after a correction.

The mainstream financial media rushed last week to announce a new bull market. This was based on the S&P 500 gaining 20% from its 2022 lows.

Just as a hypothetical exercise, imagine a high-capitalization stock in the S&P 500 index rising 1000% for some reason after a large correction. The index could rise considerably and rebound by more than 20% some analysts use to declare the start of a new bull market. However, most of the stocks will remain near their correction lows. It may make no sense to use capitalization-weighted indexes to decide whether a new bull market has started. Below is a comparison of the market-capitalization weighted S&P 500 and the equal-weighted total return indexes from the bottom of October 12, 2022, to June 13, 2023.


The S&P 500 total return has gained 23.6%, but the S&P 500 equal-weighted total return has gained only 16.5%.

Furthermore, 263 stocks are still more than 20% below their all-time highs, and the average drop of all stocks in the index is -26.3%. The median drop from all-time highs is -21.7%.

Below is the new measure I propose for deciding whether there is a new bull market after a large correction:

Median drop from all-time highs of S&P 500 constituents: > -20%

Although there may be objections, I believe this is a more reasonable measure that takes into account market breadth. Possibly, it has been proposed before.

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Specific disclaimer: This report includes charts that may reference price target levels determined by technical and/or quantitative analysis. No charts will be updated if the market condition changes affect the charts’ levels and/or any analysis based on them. All charts in this report are for informational purposes only. See the disclaimer for more information.

Disclaimer:  No part of the analysis in this blog constitutes a trade recommendation. The past performance of any trading system or methodology is not necessarily indicative of future results. Read the full disclaimer here.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

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