Bears are having trouble understanding why the stock market continues to rise, but in reality it’s due in part to the fact that there are still too many bears. Many of the people who would be sellers have already sold and are now sitting back waiting for the market to go down. That strategy rarely works.
The Standard & Poor’s 500 Index SPX+0.06% continues to move inside a rising channel (see chart, below). The channel extends from about SPX 1,360 to 1,420 at the current time. The yearly high is also 1,420 for SPX, and we would expect that level to be tested soon. This chart remains bullish as long as SPX is within the rising channel — i.e., above 1,360 at this point in time.