Do you believe in Bull markets?

by John Knobel

What exactly is a bull market?

  • In general, a bull market for stocks is a 20% rise in stock prices, which follows a previous 20% decline;
  • From October 2018 to December 2018, the Dow Jones Index fell -20% from a double top high near 26,600 to December 2018 lows near 21,710;
  • Applying the 20% rise rule for a bull market using 26,600 as our baseline, would imply that 31,920 could be a potential upside target for those who believe the 20% bull market rule;

Questions for Index Traders and Investors:

  1. If the US Dow Jones is at the start of a new bull market, which global stock indices have the highest potential to outperform the Dow Jones,  European or Asian stock indices?
  2. If the US Dow Jones is at an early stage bull market, would a +13% / +3,700-point advance towards 31,920 from current market price 28,200 be a justified move?
  3. Is 26,600 a new baseline support level to add new long positions or the level to place stops?
  4. Is the 26,600 level the target level for short sellers?

*Stock Indices Year to Date Percentage Performances:

*Indices as of 16/12/2019 15:15 EET

Source: FXGM Investment Research Department / Bloomberg