A. It depends on which camp you are in. We will present some of the bears and bulls' views below:
Bear's view: The Market Will Go Down From Here
- The market index was only lifted by a few high flyers, while most other stocks are lagging in performance
- If you use equal weight to measure S&P 500's performance in July, it only advanced 0.88% vs. 2.3% using hte actual market-cap weights
- The number of new 52-week highs relative to 52-week lows going down
- The "advance-decline line" is going down
- The percentage of stocks trading below their 50-day moving averages are not showing well
Bull's view: The Market Could Still Go Higher
- No sign of U.S. recession: the economy grew 2.3% in Q2 2015
- The Housing market continues to be strong
- The bad divergences not always leading to declines, based on historical data
- The market is still within the support zone - in the 2000-2010 area, in order to signal the end of the up trend, the market has to break down the support zone
- Investors have been pulling money out of the market, never a sign the market has reached euphoria - which usually happens when investor are pulling money in to chase the highs
The Bottom Line
No one has the crystal ball, it's best to build a diversified portfolio and aim for the long term!