The S&P 500 is up more than 50% from its bear-market lows of 3577 on October 12, 2022. The index surpassed the 20%-gain mark back in June 2023, and, according to one long-held theory, is now in a bull market. Even on the more stringent definition of a bull market -- that stocks must reach a new all-time high before a bull market begins -- a new one has started, as the S&P 500 topped the old 1/3/2022 high of 4796. There were some wobbly steps back in August, September, and October 2023, when the index sold off 2.1%, 5.0% and 4.0%, respectively, due to high inflation and high interest rates. But the market seems to have settled down as the economy continues to grow and inflation declines. What can investors expect going forward from a bull market? We have studied the 13 bull markets since the end of World War II. On average, the S&P 500 gained 164% during these 13 periods, which averaged 57 months in duration. We also note that the recent bull markets have generated higher returns over longer periods. On average, the five bull markets since 1980 have seen stocks advance about 240% over a period of 70 months. And the bull market prior to the pandemic carried on for 11 years, during which stocks rose 500%. It is worth pointing out, though, that the 2009-2020 bull market began with stocks deeply depressed on valuation, whereas stocks are already a bit above fair value in the current market environment. Even so, if rates continue to head lower on mild inflation news, earnings growth accelerates, and the economy can avoid a recession, then this new bull market, led by the performance of disruptive technology companies, could have room to run.

The S&P 500 is up more than 50% from its bear-market lows of 3577 on October 12, 2022. The index surpassed the 20%-gain mark back in June 2023, and, according to one long-held theory, is now in a bull market. Even on the more stringent definition of a bull market -- that stocks must reach a new all-time high before a bull market begins -- a new one has started, as the S&P 500 topped the old 1/3/2022 high of 4796. There were some wobbly steps back in August, September, and October 2023, when the index sold off 2.1%, 5.0% and 4.0%, respectively, due to high inflation and high interest rates. But the market seems to have settled down as the economy continues to grow and inflation declines. What can investors expect going forward from a bull market? We have studied the 13 bull markets since the end of World War II. On average, the S&P 500 gained 164% during these 13 periods, which averaged 57 months in duration. We also note that the recent bull markets have generated higher returns over longer periods. On average, the five bull markets since 1980 have seen stocks advance about 240% over a period of 70 months. And the bull market prior to the pandemic carried on for 11 years, during which stocks rose 500%. It is worth pointing out, though, that the 2009-2020 bull market began with stocks deeply depressed on valuation, whereas stocks are already a bit above fair value in the current market environment. Even so, if rates continue to head lower on mild inflation news, earnings growth accelerates, and the economy can avoid a recession, then this new bull market, led by the performance of disruptive technology companies, could have room to run.

Wednesday was a tough day for mega-cap indices, especially those with a heavy Information Technology component. Semiconductors were slammed again and it looks like the latest rally off the lows since April 19 is complete. The Nasdaq dropped 2.5%, the Nasdaq 100 (QQQ) lost 2.7%, and the S&P 500, S&P 100, and S&P 400 all fell between 1% and 1.3%. Small-caps outperformed once again, with the Russell 2000 off only 0.7% and the S&P SmallCap 600 down only a fraction. Semiconductor indices all plunged 6% or more. The iShares Semi ETF (SOXX) fell very close to its low from the latter part of June and lost its 21-day exponential average for the first time in three months. The ETF did not quite reach its 50-day average, but the major losses were accompanied by very heavy volume. The 5- and 13-day moving average crossover almost reversed its bullish cross from early May. The VanEck Semi ETF (SMH) did see a minor 5/13 bearish cross, as did the DJ U.S. Semi Index. Since June 20, the semis have generated five distribution days (big losses on an increase in volume or above-average volume). A cluster like that is certainly a warning of an intermediate-term top. We have also seen five or six distribution days on the QQQ since June 20. Renewable Energy, Electronic Equipment, and Electrical Components & Equipment also hurt Information Technology. Consumer Discretionary (-1.7%), Communication Services (-1.5%), and Industrials (-1.1%) also had tough days. Consumer Staples led with a 1.3% gain, Energy was up 1%, and Financial and Real Estate rose 0.7%. Buckle your seat belts, it's getting stormy out there. (Mark Arbeter, CMT)

Bank of America is one of the largest financial institutions in the United States, with more than $3.0 trillion in assets. It is organized into four major segments: consumer banking, global wealth and investment management, global banking, and global markets. Bank of America's consumer-facing lines of business include its network of branches and deposit-gathering operations, retail lending products, credit and debit cards, and small-business services. The company's Merrill Lynch operations provide brokerage and wealth-management services, as does its private bank. Wholesale lines of business include investment banking, corporate and commercial real estate lending, and capital markets operations. Bank of America has operations in several countries but is primarily US-focused.