Grading stocks' comeback and whether this is the start of the next leg of the bull market

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Has this simply been a relief rebound or a new leg to this bull market following a successful 'soft landing' for the global economy?

has won the respect of technical traders by nosing above a trend line that had contained all the brief rallies to fresh highs since January 2018.The performance suggests a pretty positive story animating the market: The trade war contributed to a global industrial slowdown in summer that compressed bond yields, forced the Fed into three rate cuts and inflamed recession fears.

Yet the market still has a bit to prove here. At last week's best level of 3097, the S&P was about 2.3% above its prior peak from late July. Each rally to a new record since January 2018 has been brief and none has pushed even as much as 3% above the prior high before retreating. Michael Hartnett, global strategist at Bank of America Merrill Lynch, figures risk assets can carry a good deal higher into next year as investors flee their defensive shelters and chase prices of rebounding cyclical plays.

 

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