By March of 2016 this current bull market of stocks will celebrate its seven year birthday. It is beyond rare for a cycle to last this long, and were it not for all the QE by central banks around the world it would likely have ended much sooner. All the liquidity thrown into the system had to go somewhere. That’s the complete beauty ( and complete risk) of cheap money.
We are seeing signs of very late cycle action all over the place, from the fact that classic CANSLIM breakouts have not really worked for a couple of years now to the narrowness of the rally. The only thing working to some degree are the FANG…Facebook (FB)…Amazon (AMZN)…Netflix (NFLX) and Google (GOOGL).
If you take the FANG stocks out of the major averages they would be clearly down for the year 2015. The narrowness of the advance is typical for aging bull markets. Breadth is terrible in the stock market.
The declines of last August certainly looked like the end, but the major averages rallied back. They did not however retake their old highs. Bear markets are like recessions in that you don’t know for certain you are in one until they are half or more over.
It will be interesting what 2016 brings… I hope you have a trading plan….
