Has a New Bull Market Begun? Five Signals Investors Should Watch

Markets often use a 20% rise from a low as shorthand for a bull market, but that threshold is a convention. A more useful question for ordinary investors is whether the advance has support from trend, broad participation, earnings, and the economy.

Confirmed fact: SPY closed at $771.33 on August 4 after reaching an intraday high of $773.41, above its previous range and record. That breakout matters, but one day cannot establish durability. [1]

MarketGlance calculations from SPY daily closes put the 20-day, 50-day, and 200-day simple moving averages near $747.20, $745.89, and $701.39. All three were slightly higher than five sessions earlier, and the shorter averages stood above the longer ones. [1]

A moving average is simply the average closing price over a set period. It helps describe a trend; it does not forecast the next move. The next test is whether buyers defend the breakout area and short-term averages during a pullback.

Market breadth means how many stocks and sectors are participating. On August 3, the S&P 500 rose 1.5%, the Dow gained 1.3% to a record close, the Nasdaq advanced 2.1%, and the Russell 2000 added 1.7%. Airlines, cruise operators, and industrial shares also participated. [2]

That was broader than a rally powered by one mega-cap stock, but a single session is not enough. A healthier advance would show persistent participation from equal-weighted indexes, smaller companies, and non-technology sectors over several weeks.

Confirmed fact: FactSet's July 24 update put blended second-quarter S&P 500 earnings growth at 37.9%. Excluding Alphabet, growth was 25.9%, showing both strong aggregate earnings and the large influence of one company. Ten of 11 sectors were reporting year-over-year growth. [3]

Market expectation: Analysts tracked by FactSet expected earnings growth to continue in the third and fourth quarters. That is a forecast, not a reported result. Strong expectations also raise the hurdle that future earnings and guidance must clear.

Confirmed fact: U.S. real GDP grew at a 1.5% annualized rate in the second quarter, while consumer spending rose 3.2%. June headline CPI fell 0.4% from May and rose 3.5% from a year earlier. Core CPI was unchanged for the month and up 2.6% year over year. [4][5]

Analysis: Positive growth and cooler core inflation can support risk assets, but 3.5% headline inflation remains above the Federal Reserve's target. Rising long-term yields would also reduce the present value investors assign to distant profits. This is not yet a frictionless Goldilocks backdrop.

Bollinger Bands place a volatility range around a moving average; MACD compares faster and slower trend measures; RSI summarizes the balance of recent gains and losses. MarketGlance calculations show SPY closing above its upper Bollinger Band, with positive MACD and a 14-day RSI near 59.7. [1]

That combination points to strengthening momentum without crossing the commonly watched RSI level of 70. Bollinger Band width was wider than five sessions earlier, which also warns that volatility can rise with the trend. Technical indicators describe market behavior; they do not guarantee direction.

Confirmed facts: SPY is at a record and above its major moving averages; several indexes and non-technology groups participated on August 3; second-quarter GDP remained positive; core CPI cooled; and reported S&P 500 earnings were growing. [1][2][3][4][5]

Market expectation: Analysts expect earnings growth to continue, but those future results have not been reported. [3]

Our view: Improving trend, breadth, and earnings increase the probability of a durable advance. It is still premature to declare that a new bull market has been fully confirmed because rates, valuation, and earnings concentration remain unresolved.

Risk signals include SPY quickly falling back below the breakout zone, participation narrowing to a handful of mega-caps, a renewed rise in long-term Treasury yields, weaker earnings guidance, or an expanding volatility band followed by a sharp reversal.

Our confidence would rise if the breakout survives a pullback, equal-weighted and smaller-company indexes continue to participate, earnings improve across more sectors, and inflation and long-term rates remain contained. If prices make new highs while breadth and earnings weaken, we would reclassify the move as more concentrated and fragile.