US Markets

Bearish pro surrendering; embraces the bull

Pro: Leaning to bull side
VIDEO2:2402:24
Pro: Leaning to bull side

Lately stock investors have found themselves digesting one new milestone after another.

For example, on Tuesday the S&P 500 managed to touch fresh intraday records for a fifth straight session. And just one day earlier, the S&P set its 39th new closing high for the year.

Some investors view superlatives, such as these, as signs of the top; while others believe that when stocks continue to break out, it's a bullish sign.

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Matt Maley of MillerTabak had been skeptical of the advance. And there are developments in the market that he said appear somewhat negative. "Germany's stock market can't get through its 200-day, and high yield has started to roll over. They have both been leading indicators," Maley said.

However, there are so many tailwinds in the market, Maley admitted on CNBC's "Street Signs" that he's starting to turn bullish.

"The is doing well," he noted, and Dow Theory suggests that strength in this index confirms strength in the Dow Jones industrials. Also he said, moves by the Bank of Japan should be stimulative. "And housing stocks are starting to make higher highs," noted Maley.

Going forward, Maley said he will look for confirmation from small caps. "I'd like to see the make new highs," he added, because small caps have lagged blue chips year to date. Should that happen, Maley would move into the bull camp.

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John Manley of Wells Fargo Funds Management agrees that tailwinds in the market appear far more robust than headwinds.

And although he concedes the recent selloff was scary, he called the down move a classic bull market correction. "Fundamentals are still very much intact," he said. "I think the risk of a very sharp selloff is over."