Andrew Garthwaite, global equity strategist at Credit Suisse, believes this U.S. stock market comeback is still a bear market rally and not the start of a new bull market, despite its significant magnitude and achievement of a notable chart milestone. The S & P 500 is up 11% from its low close in October, including a 3% gain in 2023. A new bull market would be confirmed if the S & P 500 rallies more than 20% and climbs to a new all-time high. Many chart analysts have also trumpeted the fact that the S & P 500 has broken above its average price of the last 200 days, a common measure of a long-term trend. History shows, Credit Suisse found, that bear market rallies of this size are not that unusual and some have traded above the 200-day average before falling back into a bear market again. On the list above, for instance, Credit Suisse notes the S & P 500 rallies starting in March 1982 and again in September 2001 also extended above the 200-day average price before failing. "Bottom line: this is close to the average bear market rally but bear market rallies can be larger and longer," Garthwaite wrote in the report. Credit Suisse also cited bear market rallies on the Nasdaq and Japanese markets to back up its claim that this is just a bounce to be faded. .SPX 6M mountain S & P 500, 6 months The firm also looked at something called the "Coppock Curve," which it says has been a reliable indicator of bear markets ending. Credit Suisse says the indicator is calculated looking at the S & P 500's "10-month weighted moving average of the sum of the 14-month rate of change and the 11-month rate of change." The S & P 500 would need to rise to 4,400 and stay above it until June to trigger the Coppock Curve indicator that the bear market is over, Credit Suisse said. The S & P 500 closed Tuesday at 3,986.37. — With reporting by Michael Bloom.
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