Go study every bull market over the past 100 years. Seriously. Go do it.
It’s more valuable than anything you’ll read here today, I promise.
Because if you don’t know what bull markets look like – their rhythms, their rotations, their quirks – you’ll be just as lost as everybody else.
I say “everybody’s wrong” all the time. And while it’s not literally everybody, it’s close.
The people who are consistently wrong in bull markets all share the same mistake: They never bothered to study how bull markets actually work.
New Highs Are Normal
One thing you notice when you actually study bull markets is how often stocks and major indexes hit new highs.
That’s the defining feature. In bear markets, you don’t see new highs – none. In bull markets, you see them constantly.
So when a stock or index breaks out to a new high, the right play is usually simple: Buy it.
New highs are evidence of uptrends. And investors make money owning assets in uptrends.
This isn’t complicated. It’s not philosophy or guesswork – it’s math.
Yet you’d be amazed how many grown adults choose to ignore the arithmetic staring them in the face.
Our friends at J.P. Morgan Asset Management put together a chart that makes this crystal clear.
Buying the S&P 500 on days it hits new highs has consistently outperformed buying at random levels:
One year out, three years out, even five years out, the returns are stronger when you buy strength.
Why? Because asset prices trend. If the S&P 500 is making new highs, it means the trend is up.
And an uptrend is far more likely to continue than to instantly reverse.
So Many New Highs Yesterday
Fast-forward to today’s market. What do we see?
Just yesterday, the S&P 500, the Nasdaq-100, the Russell 2000, and the NYSE Composite all closed at new all-time highs. That’s not noise.
That’s broad participation across the major benchmarks.
Under the surface, it’s the same story. Roughly two-thirds of NYSE-listed stocks are trading above their 200-day moving average.
That’s exactly the kind of internal strength you expect to see in a healthy uptrend.
The math is simple: New highs are bullish.
The psychology is just as simple: Humans panic at new highs.
That disconnect – the math saying “buy” while the crowd gets scared – is where the real opportunity lives.
Billionaire Bears
Here’s one last thing you should know about bull markets…
There’s always a billionaire out there warning of an imminent crash. And the media will always make sure you know exactly which one it is this time.
That’s part of the show. It happens every cycle.
If you’re not in on the joke by now, the joke’s on you.
Go study every bull market in history. You’ll see the same script play out every time:
- New highs stack up.
- Billionaires call for crashes.
- The crowd panics.
- And the trend keeps marching higher.
Top calls come and go.
Uptrends don’t.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs