(The advance-decline line measures the number of stocks that are rising, less the number of stocks that are falling.)īelow is a chart showing the S&P 500, which has rallied, while the A/D line has remained flat:īartels’ second concern is the presidential cycle. The first is the advance-decline line, which she says hasn’t confirmed the recent rally in stocks. There are three things that have Bartels worried. “We expect the US equity market to remain strong moving into year end 2012 and into early 2013, but the risk of a bear market in excess of 20% beginning in 2013,” she writes.
Bartels says that if certain underlying market trends don’t turn around soon, there could be a big correction in stocks that ushers in a bear market next year.
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