Are Bulls ready to break through?
Boy, it sure looks like it… though that is often the case at unexpected inflection points.
The S&P is battling with trendline resistance dating back to the 2007 top.
The QQQ of Nasdaq is battling similar long term resistance.
But there are some ratios pointing to a Bull run that could have a long way to go. After years of relatively weak performance, the Financials (XLF) may finally be perking up as they threaten to break above trendline resistance.
Also, Emerging markets (EEM) have broken above trendline resistance in a chart of relative performance versus SPY.
And small caps (IWM) have also started outperforming SPY.
The ratio of consumer discretionary versus consumer staples, an interesting gauge of risk appetite, is also skewing towards risk-on.
So while the significant resistance faced by the S&P and Nasdaq may suggest extreme bearishness is in order (as may the flood of newly bullish sentiment), many market internal ratios are suggesting that bullishness to be well justified.