Let's cut through the noise. If you've been staring at your portfolio and wondering, "Is the stock market in a bull market?" — I'll give you my honest read: Yes, we are technically in a bull market right now, but it's one of the weirdest, most fragile rallies I've seen in my decade of trading. The S&P 500 has climbed well over 20% from the lows, which checks the textbook definition. But the real story? It's hidden in the details. I've been analyzing markets since the post-2008 recovery, and this current cycle behaves nothing like the clean bull runs of 2017 or 2013. It's patchy, narrow, and driven by a handful of mega-cap tech stocks. So before you assume everything's fine, let me walk you through what actually defines a bull market, how to spot the real signals, and whether this rally has legs or is just a bull trap in disguise. I'll also share some practical steps I've used myself to avoid getting burned.
What Defines a Bull Market?
Most people know the simple rule: a bull market is when asset prices rise by 20% from a recent low, typically measured by a major index like the S&P 500. But that's just the surface. I've seen plenty of 20% rallies that fizzled out and turned into new lows. A real bull market has substance. It's not just about the index number; it's about the breadth of participation.
In my experience, a genuine bull market shows these three characteristics:
- Multiple sectors are rising, not just one or two. When technology is the only thing driving the index, that's a red flag.
- Volume confirms the move. If prices go up but trading volume is shrinking, the rally is on shaky ground.
- Market leadership rotates. In a healthy bull, consumer staples, financials, industrials, and tech all take turns leading. Right now, I'm not seeing that.
Let me give you a concrete example. In the bull market of 2009–2012, financials and small-caps led the charge. By 2013, tech took over. That rotation kept the market healthy. Compare that to the current rally—since the October 2022 low, the S&P 500's gains are mostly from the "Magnificent Seven" stocks. If you remove those, the index is roughly flat. That's not a classic bull market; that's a narrow mega-cap rally.
Key Bull Market Indicators to Watch
Rather than relying on a single definition, I track several indicators to gauge whether we're in a bull market. Here's my go-to checklist, and you should use it too:
| Indicator | What It Tells You | Current Signal (as of my analysis) |
|---|---|---|
| Index vs. 200-day moving average | Long-term trend direction | Above, but barely |
| Market breadth (% of stocks above their 200-day MA) | How many stocks are actually rising | Only ~45%, weak |
| New highs vs. new lows | Strength of the advance | New lows still popping up |
| 52-week high participation | Whether even laggards are recovering | Very narrow |
| High-yield credit spreads | Investor risk appetite | Tight, okay for now |
| Leading sectors | Cyclical vs. defensive leadership | Defensive sectors like utilities are outperforming |
If I see breadth improving and more sectors joining the rally, I'd be more confident calling this a true bull market. Right now, the tape feels like it's being held up by a few iron pillars, but the foundation is shaky.
How to Tell If the Stock Market Is Still in a Bull Market?
So, how do you actually check today whether we're still in a bull phase? You don't need a Bloomberg terminal. Here's a simple, repeatable process I use every week:
Step 1: Check the Major Indexes
Look at the S&P 500, the Dow, and the Nasdaq. Are they above their respective 200-day moving averages? If yes, that's a positive. If the S&P 500 is below, you're not in a bull market, period.
Step 2: Measure Breadth
Go to a free screener like Finviz or TradingView. Look at the percentage of stocks trading above their 200-day moving average. In a healthy bull, that number should be 60–70% or higher. If it's below 50%, the rally is not sustainable.
Step 3: Track Leadership
Note which sectors are driving gains. If you see five or more sectors hitting 52-week highs, that's broad-based strength. If it's just tech and tech-adjacent, be cautious. I've seen this script before—it ends in a sharp correction.
Step 4: Watch the Fed and Rates
Bull markets don't like rising rates. Check the 10-year Treasury yield. If it's climbing rapidly, it can choke off the rally. Federal Reserve policy changes are like the weather—know the forecast.
Step 5: Trust Your Gut (But Verify)
After following the data, ask yourself: does this feel like a broad-based breakout or a desperate bid to keep the index green? Your instincts matter, but only after you've done the homework.
Non-consensus warning: Most people focus on the price level. I focus on the participation. A price high on weak breadth is a time to de-risk, not to chase.Current Market Conditions: My Honest Assessment
Let's be brutally honest: we are in a bull market, but a shaky one. The S&P 500 has been making new 52-week highs, and many analysts point to that as proof. But when I dig into the underlying numbers, I see a different picture.
I pulled the latest report from the Cboe and looked at the put/call ratio — it's been hovering at extreme levels, suggesting investors are hedging heavily. That's not typical of a confident bull market. I also noticed that the equal-weight S&P 500 has dramatically underperformed the cap-weighted index. That gap is a huge tell. From my own tracking, the AI-related stocks are carrying the entire load. If you exclude a handful of names like Nvidia, AMD, and Microsoft, the market is essentially flat.
I remember a similar setup in early 2021: the index was rising, but only a few stocks were responsible. While many called it a bull market, I urged my clients to trim their winners and hold cash. Then the Nasdaq corrected 13% in March 2021. Not a crash, but enough to wipe out a year's gains for latecomers. I see the same risk here. The difference is that this time, the concentration is even more extreme.
Are there good things? Yes — the labor market remains resilient, and corporate earnings are exceeding expectations, albeit with declining margins. But in my experience, technicals often lead fundamentals. The narrowness is a warning.
Common Misconceptions About Bull Markets
New investors often make mistakes during bull markets because they rely on myths. Here are the top three I've had to correct repeatedly:
- Myth #1: "It's a bull market until the index falls 20%. " Actually, the market can start a new bear well before that, as breadth deteriorates. By the time the index drops 20%, you've already lost a significant chunk.
- Myth #2: "The index is the market." No. The index is a vanity number. Many stocks never recover to prior highs even in a bull phase. I've seen mid-cap and small-cap indices lag for over a decade.
- Myth #3: "You should buy the dip in a bull market." Sure, if it's a real bull. But if it's a narrow rally, dips often turn into extended declines. I've learned to look for confirming breadth before catching a falling knife.
One specific mistake I've seen novices make is to pour all their money into the hottest sector. A client of mine did that with tech stocks during the 2020 bull. He made a fortune, but then held on too long and gave half of it back. In a bull market, discipline matters more than greed.
Practical Tips for Investing in a Bull Market
If you're convinced we're still in a bull market (or just want to prepare for both scenarios), here's my practical playbook:
- Diversify into beaten-down sectors. Instead of chasing megacap tech, look for value in financials, energy, or materials that haven't moved. This protects you if the leadership rotates.
- Keep cash ready. A bull market always has pullbacks. Having 10–20% cash lets you take advantage of those dips without selling your long-term positions.
- Set trailing stops on your winners. I know stops feel wrong during a strong rally, but they save you from human stubbornness. Automate it.
- Revisit your risk tolerance monthly. As the market rises, your portfolio's risk profile changes. Rebalance to keep your original asset allocation.
- Watch credit markets. If high-yield spreads start widening, that's often a signal that the bull is aging. I check the HYG ETF as a quick gauge.
- Don't ignore global markets. International stocks are still historically cheap. A true bull market lifts all boats; if they're not moving, the tide may be turning.
I realize these tips are simple, but they're the ones I still follow myself after years in the business. There's an old saying: "Don't confuse brains with a bull market." Abiding by these rules keeps you humble.
FAQ: Your Burning Questions Answered
After all this analysis, you're probably wondering, "So what's your final verdict?" I'd say we are in the late stage of a bull market, but it's a bull nonetheless. The data doesn't lie—the index is making highs. But the narrowness tells me to stay cautious. Use the signals I've shared, and here's the most important piece of advice I can give: Don't let a bull market make you complacent. The moment you assume it'll last forever is the moment it ends. I've seen it happen too many times. Keep your eyes open, and you'll be ready for whatever comes next.
If you found this helpful, bookmark it. And if you're still uncertain about your specific portfolio, do the analysis yourself or seek advice from a trusted advisor. I write these guides to share my decade of experience, and I hope it saves you from the mistakes I've already made.
