Stocks are in a 'slow-motion meltup' as investors jump into bull market

Stocks are in a"slow-motion meltup," as investors start to believe that the bull market can last, DataTrek said in a note this week.

The research firm pointed to unusually low volatility in the stock market, with the S&P 500's current realized volatility gauge measuring at 0.8% over the last 100 days. That puts the benchmark index"solidly in bull market territory," as the bull/bear market line has held around 1.1% since April, according to DataTrek co-founder Nicholas Colas.

Bull markets tend to be less volatile than average, while bear markets are more volatile than average, Colas said, as bull market investors slowly evaluate stock fundamentals and macro conditions before buying into the rally. During the last four US bear markets, for comparison, the realized S&P 500 volatility fluctuated between 1.5%-3.9%.

"If the S&P were rallying on high volatility , that would be a warning sign that all was not well. This, however, is not the case just now. Instead, we have a slow-motion melt up," Colas said."This means investors have not only bought into the idea that stock prices will go higher, but also that it is worth their time and effort to make sector-specific bets away from Big Tech.

Wall Street commentators have also pointed to a number of bullish catalysts coming up that could fuel more stock gains.

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