CNBC Declares New Bull Market

On CNBC at about 2:52pm, Matt Nesto declared that the bear market was over and a new bull market has begun. His evidence: “October is the bear killer.” Several bear markets in history have ended in October, and its October now, so the bear market must be over. Right?

Seems a bit flimsy to me.

Nesto also mentioned the VIX, but is the VIX’s bull run really at an end? Here is how I draw my VIX trend line (click to enlarge):

The chart uses daily closing levels, and I think that the purple line best represents the major trend. The green line is a minor trend line that has indeed been breached. Before we can presume a new bull market, or even a new bear-market rally, I think the purple line needs to be breached.

If you look at an intra-day chart of today’s trading, you will see that Nesto’s report almost perfectly top-ticked the action. So far, so bad.

If CNBC had informed us that the bull market had ended last year, I would take today’s declaration more seriously. But what are the chances of CNBC getting this right? In fact, I’m sure they’ve got it exactly wrong.

Let the record show that CNBC declared the 2008 bear market to be over on the very day that the great bull market that began in the early 1980’s came to an end.