Next hurdle for stocks: Take out old record highs

The broad U.S. stock market is back in the black for the year, erasing its sizable losses in what had been its worst start to a year — ever.

But for the bull to get a second lease on life, the Standard & Poor’s 500 stock index has to do more than just stay in the plus column for 2016. In short, it has to take out its previous record closing high of 2,130.82 from May 2015. If it does that the bull market will be back on, and the correction that kicked off the year will end as just that: a correction -- and not a bear market, or drop of 20% or more from a peak.

Until the bull reasserts itself and tallies another record, the current rebound rally will be viewed as nothing more than a counter-trend rally in a down market.

But if the bull can keep grinding higher and notch a fresh record, it would cement its position as only the third bull market in history to last seven years. If it can close at another peak and also not suffer a 20% drop between now and the end of April, the 84-month old bull will supplant the 85.6-month-old bull that ended in August 1956 as the second longest in history.

So, there’s a lot at stake for stock investors. A new all-time high would confirm the rebound rally is for real. It would also mark a new starting point in which future corrections (or drops of 10% or more) and bear markets are measured. But if the bull stumbles, the market narrative will quickly shift from rebound and resilience to a tired bull still stuck in a new downtrend.

In pre-market trading Tuesday, the S&P 500 was down 6 points, or 0.3%, perhaps spooked by what authorities believe were terror attacks earlier today in Brussels.