The unrelenting bull gallops on

The October and November rallies that were envisioned at the end of September have indeed occurred - evenly more strongly than most commentators expected - including myself. The market's remarkable ability to put together breathtaking rallies in a very short period of time hasn't changed. Many commentators have affectionately refer to these unending spikes higher as "V-Shaped rallies" given their visual similarity to the letter "V". They litter the charts since the advent of quantitative easing.

 

V-Shaped SPX rally

If you look at the strongest index, the NDX 100, the move is even more pronounced and strong. Not only did it "V-Shape" higher, it completed a very large and improbable bullish ABCD structure to the topside and made new highs to boot. If you were looking for action, the NDX 100 was the place to be in October. In fact, I dubbed fifteen stocks inside that index as the "Nifty Fifteen of 2015" - the primary drivers of this year's push higher (Links to the Nifty Fifteen videos are here, here and here).

NDX 100

Now the big question becomes, "Can this market trade even higher?" Will the new highs on the NDX 100 be followed by new highs on the NASDAQ, the S&P 500 and eventually the Russell 2000?

Of the three majors, certainly the NASDAQ looks to follow as it has scored two important victories. It traded back beyond the bearish retest and regenerate zone on the intermediate term time frame and secondly it has traded back over the breakdown bar.

NASDAQ Composite

The S&P 500 is a little less certain but it too has a good chance at seeing new highs now given the strength in the NDX 100 and the NASDAQ. It has two important bearish neoclassical technical items still to overcome though they are looking more and more like technicalities rather than impregnable barriers.

S&P 500

The bottom line is that the market once more, with the assistance of the generous offerings from the central bankers around the world, has rallied back as if no problem is too big to solve. The continued belief in their omnipotent stature remains and likely continues that way until a significant and lasting shock occurs that irrevocably shakes investors' confidence in them. Markets are always about confidence and doubt, fear and greed, hope and pessimism. This market is no different and, to many an investors' amazement, the doubt remains insufficient to seriously wound the bull, let alone kill him. It's going to take more time and dashed hopes it appears.

 

This article was original published on MarketWatch on Nov 20, 2015 12:21 p.m. ET