Resumption of the Bull Market or Dead Cat Bounce?

SYNOPSIS

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We seem to be experiencing the Santa Clause rally that we missed in December. We now have to decide whether this is the end of a correction in a very old bull market, or a a dead-cat bounce that can often happen near the beginning of a new bear market. We discuss this in more detail in this week’s PTA Perspective section.

Day by Day… Another week of gains… this time with no interruptions over the week.

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PTP… Our PTP APAR score barely moved over the past week, but the S&P/TSX Composite Index and S&P 500 APARs reversed direction from their downward trajectory. The S&P/TSX Composite Index score moved from -6% to +29%, and the S&P 500 counterpart rose from -34% to +1%.
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We sold one position last week and bought one more. We still have only two positions, but that at least gives us an APAR score to follow. In other accounts, we’re still 100% in cash.

Cannabis Corner… There was definitely a revival of sorts in the pot patch last week. Some of the better known names gained 20% or more over the past five trading sessions.

PTA Perspective… Resumption of the Bull Market or Dead Cat Bounce?
A market rally after a prolonged downturn like the one we saw in late 2018 can feed on itself, as more and more investors speculate that this may be a bottom to the correction we’ve experienced, and the resumption of a very old bull market. Sometimes that’s true, but sometimes it’s a so-called “dead cat bounce”… a short upswing before the slump resumes. This week we discuss the implications of either side of this debate.