On Nov. 4 I outlined the performance issues in the broader indexes and questioned whether we were actually in a bull market. On Monday, many indices made new all-time highs and I find myself raising the same question again. Before you question my sanity, let me outline the evidence.
First, note what actually happened. On the night of the election, S&P 500 SPX, +0.08%futures actually dropped below November 2014 highs. Futures were lock limit down, and circuit breakers stopped the descent. Yet, as with Brexit, overnight magic happened and all damage was erased by the open. The markets then proceeded onto a vertical up tear, pushing small-cap futures 18% off the lows in a mere nine days. An impressive feat by any standard, but if you think these are signs of stable markets, consider my thesis: Markets have been rising on hot air, and technical charts retain heavily bearish structures despite new highs.
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