Too late to join the bull run?
The bull run for SPY is now almost a year old. Before this bull, we had a mini-bull run from April – July 2023 at the end of the Biden bear market, but that came to a very sticky end between August and October 2023. Right back down (almost) to where it started! So it was with trepidation that we entered on the golden cross in November last year.
Is it too late to trade the bull?
Since then, we have had a few heart-stopping drops – in April, August, and September, but we are now making new highs. The dips were painful, but they were waves, not the tide. But that, of course, brings up the question many of you ask: is it too late to trade the tide?
Riding the Bull
Given that the market had risen nicely since we got in, the questions were understandable, and April’s dip seemed to show that they were right, but let’s look at the chart.

At the end of March, SPY had been trading in quite a tight trading channel Having got in at $440 and now trading at $518 we were sitting on a profit of around 35% (at ITM 50% strike) in just over 4 months. Nice. Who wouldn’t be happy with that? Why don’t we take the money and run?
The bears came back!
The first 3 weeks of April tested our resolve to stick to the ITM strategy. The bears took over, and drove SPY down to $495, a drop just over 5%. It would have been very easy to say ‘Oh no! 5% down! That’s it, I’m out!’ and sell at a 25% profit. But what would we have left on the table?

Bulls can last a long time
Right at the March peak, I wrote the blog about how long a bull run could last. I looked at a previous SPY bull run and marked all the times when the ‘let’s take profits’ urge would have come. It’s worth a read (if I do say so myself). Here’s the link: Riding the Bull.
I said in the blog:
Let the market tell us what it is doing – not what we feel it should do, or what we fear it might do.
I’m quite impressed with that; and of course there’s my favourite saying:

We can all be brilliant traders in hindsight.
Market Peaks
It’s easy to write a book demonstrating that your strategy works on carefully-selected data. Backtesting your strategy on data for the last 30 years and writing a ‘live’ weekly blog is quite a different beast.
As Buffett says:
“Only when the tide goes out do you discover who’s been swimming naked.”
There’s some good information on the April Blog Market Peaks that you may want to review. Here’s the link: Market Peaks.

What was the right decision?
We got in last November at $440. On Friday, SPY made a new market high of $580 (figures are all rounded). Yes, it has been going sideways for a couple of months (July – September) but now it is making new highs. And our profit now stands at over 60% on a 50% strike. Higher on a 60% strike.
Aren’t you glad we didn’t take profits after 25%?
Bull markets can go on longer than you imagine; bear markets are few and far between. It always seems remarkably unlucky that I published the ITM Bull just after one bear market had ended, and just before another started. But the good thing is that you have seen ITM working in both bulls and bears.
Apology for last week
There was a duplicated paragraph in last week’s blog, about the SPYG results.
My mistake, sorry; it has now been fixed.

ITM Chat
It’s becoming a bit of a saga. The first chatroom I set up using Simple Ajax Chat turned out to be completely hopeless – no topics, no history, just one message visible. Seriously. What is the point of that? As soon as I saw how limited it was, I took it down again.
Now I have set up (still in draft, not fully functional) bbPress which allows different topics, and history.
Naturally, it was incompatible with the settings of the rest of the website. It required a lot of tweaking and mucking around with html and CSS before I could get it functional – thank goodness for Chat GPT to answer my technical questions, otherwise I would have given up in disgust.
ITM Chat - No Login
I had it set up with a login every time – then I thought why do that? Everyone is fed up with how many times a day they have to login to this or that, and it’s not as though this is going to have millions of visitors.
The only people who will know it is there are people who read my blog, so all I have to do is protect from spammers, hence the Captcha.
I use hCaptcha as it is visual not those wonky letters which are really irritating and I always get wrong!

WiP (Work in Progress)
So, here’s the link: ITM Chat. Remember it is a work in progress but if you would like to try it and post some test replies that would be good. The other thing I would like your advice on is the topics. As a starting point I was thinking of
– Choosing Options
– Markets & Books
– Strategy Ideas (ETFs)
– Strategy Ideas (Stocks)
I don’t know if this is what people want so please let me know.
NVIDIA
You may remember that in the blog on 30th September I shared that I had had a flutter on NVDA. And that it was a bad trade and that I was managing it badly.
I felt I had to walk the talk, so I sold them the next day.
Brilliant decision. Not.
As soon as I sell it rises rapidly to way above where I bought in.
Smack! Mr Market teaching me yet another lesson.
OK, OK, I get it, no more stocks!!

To the markets . .

Last week SPY made a new high on 2 days. It made headlines all over the financial press, and everyone was euphoric.
Wall St gurus drank champagne and danced in the streets.
Robert Kiyosaki admitted he was wrong, there was no crash, and apologized to all his readers.
Harry Dent put out a statement saying his books were a hoax, and he was sorry if anyone had taken them seriously.
OK, just joking, none of these things happened – except, of course, SPY DID make new highs. On Wednesday and then again Friday, but no-one seemed to notice. If there were any headlines I missed them. Everyone seems determined to ignore it, and instead wallow in pessimism. Remember the quote from Sir John Templeton.

If this is euphoria, it’s a pretty strange euphoria!
SPY Charts
We have been trading over the previous resistance level of $564 for almost a month now, and seem to be heading higher. If this keeps going, I would expect some resistance at 600 and it is such a high, round number.

And the weekly chart shows the uptrend still in place.

SPYG Charts
SPYG has not yet made new highs, but is fast approaching that level. IN July it made a new high of $84.10. On Friday it closed at $83.72. Like SPY it has been range-bound for almost a month, and hopefully this week we will see it break out.

The longer term chart shows the uptrend still intact.

QQQ Charts
Like SPYG, QQQ has not yet taken out its previous high made in July, but is getting close. On the 10th July it closed at $502.96; on Friday is closed at $493.36, so it is getting close. $500, being a big round number is a bit of a hurdle, and I expect a bit of hesitation before it is finally taken out.

On the long term chart, we can see that it is still bouncing around the bottom of the trading channel.

VIX Chart (Volatility)
We can see that the VIX is still hovering around 20.

ITMeter

The week ahead . . .
Earnings season gets into its stride, with some major banks due to report: BAC (Bank of America), C (Citigroup), GS (Goldman Sachs) are reporting on Tuesday, MS (Morgan Stanley) on Wednesday. Other major companies reporting this week are JNJ (Johnson&Johnson), UA (United Airlines) ANML (chipmaker) and NFLX (Netflix).
The financials that reported last Friday were JPM (JPMorgan), WFC (Wells Fargo) and BLK (Blackrock), all of whom had better-than-expected earnings, leading to the record highs. We can expect some volatility this week. Let’s hope the earnings are good and beat expectations.
Fed officials are talking again; there’s a lot of speeches, so expect these to be dissected in great detail for clues about interest rates.
The Futures
Right now, the futures are down a bit, but we still have 11 hours to market open.

Fingers crossed for a good week!
Heather
Q&A
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23 Responses
Hello Heather, actually I can tell when the market tops but will discuss details in a private cobversation if you are interested.
Hi Razan – well, that’s a big claim! I am all ears.
If you send an outline of your method to info@heathercullen.com then I would be most interested in reading it.
Tyhanks!
h
IWM (russell 2000 index etf) 130 calls for Jan 16 2026 have a spread of $1.45.
That doen’t seem too be too bad.
SPY 320 calls for Jan 16 2026 have a spread of $3.88.
HI Al, yes you are right about the spread.
However, the Russell behaves quite differently to SPY and QQQ and I have no idea what the results would be.
If you want to trade it you could backtest it – the instructions are here: https://heathercullen.com/backtesting/
The documentation sets out the rules and the instructions for creating your own backtesting system.
Do let us know what you find! Maybe it is even better – we won’t know until we test.
h
From 2001 through 2011 IWM outperformed SPY
I base this on a relative strength chart at Stockcharts.com
Enter IWM:SPY and use a monthly timeframe for a long-term perspective
However, since 2011 IWM has underperformed SPY significantly (except for brief periods of outperformance, such as the recovery from the 2020 covid bear market)
I wouldn’t consider using ITM on IWM until I saw a reversal of this long term underperformance.
Hi Al,
IWM seems to be coming up a lot recently – I must pay more attention to it.
Actually, I was just reading about it and how its performance depends on its’ long tail’ which, of course, would be longer simply because of the number of stocks in it, so the more chance of getting a stratospeheric outlier.
I think. Not sure that’s logical, will have to conside!
Planning on doing something about it in next week’s blog.
h
I tried using the chat but it said that I must be logged in to do so.
Michael
HI Michael – yes, sorry, it was one of the settings. I could see it but didn’t think that other people could.
Have fixed it (I think) please try again and let me know.
thanks
h
Have you ever found any good correlations on mid cap or small cap indexes ?
Thanks
Gary
Hi Gary
there are two things to think about when selecting an index (well, probably more, but we’ll go with 2 here)
The first is correlation, and quite a lot have a reasonable correlation. What they don’t have is volume – which means that the spreads are large. Because there are not many buyers and sellers the market makers set the prices and sometimes the spread is 10% or more. Which means that when buying you are paying 10% more, and again when you are selling. 20% takes a lot of your profits.
That is the main reason we trade SPY and QQQ – both have very small spreads. SPYG has a slightly bigger spread but still not too bac.
Hope this makes sense.
h
Well it looks like you can’t reply to a chat topic as you requested without a login and I don’t see a place to create a login and I get no response if I just enter my email address and say I forgot my password.
Hi Mike – thank you for letting me know. Try it now, I think it is fixed.
h
Hi Heather,
Great job as always. My topic in a chat or the blog is. Market Makers – brokerage houses – big traders… I have always thought “ conspiracy theories “ when it came to buying and selling stocks. I remember buying 1k shares of a robot maker and upon earnings tanking in Hong Kong and me losing 12K before the market opened. Or as soon as I buy something it goes down or selling some thing and it go. Or stories like a market maker taking everybody’s stop losses out and then making it move higher. I feel like as I look at the pc somebody on the other end saying “ He’s buying abc stock sell it short until He sells it “ … My psychiatrist says it’s “ all in my head “… could you explain the role of a maker maker and the role of the Fed ( as Lender of last resorts ).
Randy
HI Randy – I know the feeling, that’s why I don’t like the unpredicability of stocks, preferring indexes as they are self-correcting.
Re market makers and the Fed – I understand market makers a lot more than I understand the Fed! Yes, I will address this in next week’s blog.
h
Dear Heather,
Thank you for your weekly blog as always. Speaking of the current bull run of SPY of almost one year old from November 2023, I read from the media that the current bull run is almost two years old from October 2022. What is the difference between these two types of bull runs? One that you have mentioned and the other one from the media. Thank you.
Sincerely,
George Halongton
Oct 2022 was the low. I believe Heather is looking at it from the ITM golden crossover. Both are correct from their vantage point.
Yes, Anthony, you are right – I was looking at an ITM bull run. I wasn’t clear, will address that in next week’s blog.
h
Thank you, Anthony, for your response.
I appreciate it. Happy New Day to all.
HI George – I meant the ITM bull run (i.e. starting at the Golden cross) not that it was the start of the bull market.
I didn’t make myself clear, apologies.
I should maybe discuss that in next week’s blog so that everyone is clear about the difference between a bull run and a bull market.
Thanks for pointing out!
h
Hi Heather,
When the market gave a golden cross last November, it was a good time to enter. What advice would you give the readers like me who just started finishing the book and want to start entering the market? Do we just enter regardless of where market is? I don’t think it’s wise to wait till the next golden cross because you mentioned bull runs can go very long.
Thanks,
Danny
Think you answered your own question. I started it one 9/9/24 for QQQ and 8/2/24 for SPY. Just have to jump in and acknowledge you may have a loss if the market turns around sooner rather than later. If it rises enough for about a month you may have a break-even situation as your worst-case scenario.
Hi Anthony – yes, you are right. Traders always have to accept that not every trade can be a winning one, we just have to make sure that our losses over all are much smaller than our wins.
h
Hi Danny, I have always given the advice that if you have decided to get into the market just get i. Don’t wait for a ‘good’ time.
Re the waiting for a death cross – you can be waiting a long time! For example, ITM golden cross in June 2020, the death cross was Feb 2022 – 19 months later. The golden cross in March 2016 – the death cross was October 20018 – more than 2 years later.
I can’t tell when the market is going to turn – no one can, and if you get in at the top then yes, you will lose money as you can do on every trade.
I can only really tell you what I am doing – which is staying in the market until I get the signal to get out. I get that you won’t make as much money as people that got in 11 months ago – but there may well be a fair way for this bull to run.
Hope that helps
h