Markets fell last week. The S&P 500 fell 0.9 percent and the STOXX Europe 600 fell 1.1 percent.
Paul Hickey, co-founder of Bespoke Investment Group, told CNBC last week that the underlying trend for the stock market remains bullish.
Pointing to the technical indicator called the advance/decline line, he noted that the cumulative A/D line has been making a series of new highs. “That tells us that there's an underlying trend in the market where investors are acquiring stocks,” he said.
He added that this holds true for the S&P 500, the Nasdaq and the Russell 2000.
He said that “what all three are telling us is that the rally isn't just being driven by a few stocks”.
In a Forbes article, technical analyst Tom Aspray also looked at an advance/decline indicator, calling it “the most important warning of a bear market”. Aspray focused on the monthly NYSE A/D line and found that it too has been making new highs.
According to Aspray, other things to watch out for as indicators of a coming bear market are peaks in consumer sentiment and leading indices of economic indicators.
In the meantime, Aspray suggested that while trade threats could trigger some more profit taking this week, “this should be a buying opportunity for those without long positions in equities”.
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