Top 10 Tells Why This Is a Bull Market
By James J. Cramer
1/23/01 4:27 PM ET
This rally is not a bear market rally. It is a bull market rally. How do we know? How about these important tells?:
1. Safety stocks are getting killed, even when they do the right thing. (Merck (MRK:NYSE - news - boards))
2. Brokerage stocks are going higher, and they are the ultimate tells. (Merrill Lynch.) (MER:NYSE - news - boards)
3. The stock market opens lower (the futures have been down at the opening for days) and then rallies.
4. Stocks go up on bad news and go up big on good news. If they get hit, they come back, and fast.
5. The crummy stuff, for the most part, is no longer spiking. We are through with the January effect and now people are just buying high-quality blue-chips that have some economic exposure.
6. The futures are no longer in charge. All last year, during the great bear market, we would see one seller come into the futures and knock the whole shebang down. It would be incredibly disconcerting. Now the market is being cash-led, not futures-led, and there is real buying.
7. Volume is terrific, and it is building on some of the beaten-up names. Bear spikes are typically on thin or no volume. Advances beat declines big, and new highs are crushing new lows.
8. While the sentiment numbers are not that bullish -- meaning I wish there were more bears -- you can't find anyone other than the diehard momentum guys who actually like the market. There's a nice wall of worry.
9. Liquidity is roaring back. You can move stocks without rocking them, either to the upside or to the downside, the latter being incredibly important. Merchandise is moving.
10. The Fed has sanctioned the move. Remember, we had a Fed-mandated bear market last year. Now the Fed wants your portfolio to do better and you to feel better. It is doing its best by not quelling speculation on big cuts coming forward.
You know I have been adamant that this is a new bull market. You know that I went on record blasting those Nasdaq 1500 sirens. But there are still persistent emails from people asking me if this is just one more big bear spike.
To which I say, give me a break. Tape this checklist to your forehead if you can't remember it and nail-gun it to the bears in your firms and households. It might put them out of their misery for good! |
