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Argus Analysts Say This Distrusted Bull Market Has Climbed The Wall Of Worry

Argus Analysts Say This Distrusted Bull Market Has Climbed The Wall Of Worry

There is little doubt among investors that the stock market's ability to shake off a jittery start to the year and the surprising Brexit voting result have been impressive. The analytically cautious outlook is also the view of analysts at Argus Research.

In a research report dated Wednesday, the analysts suggested that the current bull charge in the equity market is "one of the more-unloved and deeply-distrusted bull markets in history."

Stocks in 2016 have been led by gains in defensive sectors, such as utilities, staples and telecom, along with resource companies and inflation-sensitive sectors such as materials. However, the trend reversed course and utilities are "down fractionally" while staples are flat. Consumer discretionary stocks are up 5 percent for July, while financials and healthcare are up in the 3 percent to 4 percent range.

Related Link: Patient Bulls Still Waiting For A Market Pullback To Deploy Funds

Finally, the analysts suggested that the bull charge isn't over. They stated that a bull market simply doesn't stop on its own just because "doubters say the rally is over." Rather, the market could pull back and retest high levels but if a rally is real then any pullback represents a consolidation of recent gains and also builds a base for further advances.

Finally, the analysts pointed out that the cumulative advance to decliners on the NYSE during the summer months of 2011 were near the 3,000 level. It retested the 3,500 in May 2012 and recaptured the 4,500 level at the end of the year.

The advance to decliners surged to 8,700 in June 2014 and this level wasn't seen again since early June of this year. Now the advance to decliners stands at 9,400 — indicating the bull market could be in its "early days" and "not late" stages.

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