Michael Batnick: Was That Just A Bear Market?

One of the hottest debates on Wall Street since the S&P 500 started out 2016 with a historic sell-off is whether or not we are on the cusp of a bear market. According to Rithholtz Wealth Management’s Michael Batnick, the bear market may have already come and gone.

A bear market is typically defined as a 20 percent pullback in the S&P 500. February’s sell-off didn’t eclipse that threshold, but Batnick notes that the majority of the stocks within the index did.

“The S&P 500 at -15.3% might not have fit the ‘definition’ of a bear market but don’t tell that to the average stock, which fell 34% from its 52-week high,” Batnick points out.

Related Link: Are Defensive Stocks Now Riskier Than The Rest Of The Market?

Since 1970, the S&P 500 has averaged a new 52-week high once every 38 days. Since last year’s all-time high, it has been 252 days and counting. However, just because the market isn’t making new highs doesn’t mean it will soon be making new lows.

“Entertaining as it may be, it’s mostly a waste of time trying to label what type of environment we’re in, because much of the time, like today, we’re in neither a bull nor bear market,” Batnick concludes.

After a horrible start to the year, the SPDR S&P 500 ETF Trust SPY is now up 0.7 percent year-to-date.

Disclosure: the author holds no position in the stocks mentioned.