Here's why a bull market may have already started even though it doesn't feel like it, according to eToro's investment analyst

• A new bull market may already be underway, according to eToro's US investment analyst.
• If the economy avoids a recession, then it's possible stocks have already bottomed out and will tick higher in 2023, Callie Cox told Insider.

If the US economy avoids a recession, then a new bull market may have kicked off already, according to trading platform eToro's US investment analyst.

In eToro's year-ahead outlook, Callie Cox makes the case that even though it may not seem like stocks are on the upswing, it's rarely the case that bull markets resemble bull markets in the early stages.

She pointed out that the S&P 500 has fallen 26% from peak to trough, which is about in line with prior bear markets dating back to 1950 that haven't coincided with a recession.

"A bull market starts at the lowest point of a bear and is confirmed when an index reaches a new 52-week high," Cox told Insider. "So if the October low really was the bottom, we've been in a bull for two months. Typically, new bulls don't actually feel like bulls, but it's costly if you miss the beginning of one."

Not only that, but corporate earnings this year have remained relatively resilient, she noted, and downward revisions for 2023 are not nearly as steep as the previous 11 recessions.

To be sure, a recession isn't entirely out of the question as the Federal Reserve still has a difficult road ahead of bringing down inflation, with more rate hikes likely. With that in mind, eToro is advising investors to add quality risk positions that prioritize strong financial strength and cash management.

In contrast with eToro's view, UBS strategists have cautioned that stocks have yet to bottom and markets aren't fully pricing in the odds of a downturn. Barclays, too, has issued a similar warning.

But that's nothing new to Cox, who maintained that sentiment has been negative all year.

"We've been ready for this recession for months," she said. "Markets run on expectations, and when the worst-case scenario is already priced in, the punch tends to hurt less than you think."