Signs of a Bull Market?
There’s a saying: “In bull markets, stocks don’t sell off on bad news.”
I mention this because the latest jobs data is out and it’s horrific.
Another 4.4. million Americans have filed for unemployment, bringing the total number of new unemployment cases to 26 million.
These are DEPRESSION-type numbers. And yet, stocks are holding up.
The S&P 500 last peaked on April 17, 2020. Despite a rash of horrific economic data, the index has barely fallen over 5%.
As investors, we have to trade the markets as they are – not as we wish they were. And the market is holding up shockingly well given what’s happening in the world.
Remember: “In bull markets, stocks don’t sell off on bad news.”
What’s even more shocking is the fact that ENERGY stocks are UP more than the broader market this month.
The Unlikely Sector Gaining Major Momentum
That’s not a typo. The Energy ETF (XLE) is up 16% while the S&P 500 is up 8% in April. And this is happening at a time when oil prices dropped to NEGATIVE $40!
This again suggests we are entering a bull market. In bull markets, stocks don’t sell off on bad news.
Also, if you compare the performance of the top performing sector (tech) to the worst performing sector (energy), you see what looks like a bottoming process.
Again, I realize this sounds crazy, but we have to trade the markets as they are, not as we wish they were. And the markets are suggesting a new bull market is starting and that energy might be a great place to invest.
I’ll be digging in deeper to this in the coming days.
Editor, Money & Crisis