The Dow and the S&P 500 Are on the Brink of a Bear Market

[jeffalvinson]

Right, but we've had weeks of pretty obvious selling to take advantage of. I see everyone talking about entering a bear market, but that is for the most part a general main stream consensus with generally everyone agreeing on a relatively close percentage decline.

If this is for entertainment purpose only, than no need to answer. Otherwise I am genuinely curious how is this information helping you to make money? Are you going to start shorting once we "officially" enter a bear market? or now do you sell your longs and look to re-enter lower?

Or in other words what would you or are you advising yourself to do once this "officially" occurs?

I use this chart in the post to move out of very long term 401k money when there is a monthly close -1.5% (or greater) below the 40mma.
Most Bear drops are -45% to -55% (-50% average) below the highest peak value of the last Bull Market.
So in the current case, 3400 minus -45% to -55% is 1,870 to 1530 (average 1,700).
I would re-enter the SP500 at approx. 1,700-1,870.
This worked in the Bear Markets of 2000-2003 and 2008-2009.
The only thing that I have changed with time and experience doing this is
where to re-enter the market.
In the past I have tried re-entry at a monthly closing candle above the 20 mma (month moving average) and also tried the 40mma. The problem with re-entries above those closing monthly moving averages is, the market burns up to much gain getting to those points.
So now I just re-enter at -45% to -50% below the last Bull Market high.

 

[trdes]

I use this chart in the post to move out of very long term 401k money when there is a monthly close -1.5% (or greater) below the 40mma.
Most Bear drops are -45% to -55% (-50% average) below the highest peak value of the last Bull Market.
So in the current case, 3400 minus -45% to -55% is 1,870 to 1530 (average 1,700).
I would re-enter the SP500 at approx. 1,700-1,870.
This worked in the Bear Markets of 2000-2003 and 2008-2009.
The only thing that I have changed with time and experience doing this is
where to re-enter the market.
In the past I have tried re-entry at a monthly closing candle above the 20 mma (month moving average) and also tried the 40mma. The problem with re-entries above those closing monthly moving averages is, the market burns up to much gain getting to those points.
So now I just re-enter at -45% to -50% below the last Bull Market high.

Thank you, that makes sense. I appreciate the reply, often people just post information with no context so I like to know if they actually believe what they're posting or just doing it out of pure boredom/entertainment.

 

[murray t turtle]

Should I go short once we "confirm" were in a bear market?

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I would not do it based off a [-20% correction off DOW/DIA] or 40ma monthly chart, which is about $ 270 on SPY.I use a 50 period ma more; IBD uses a 40 ma ................................
AS weak as DOW/DIA is ; I prefer a weaker group or ETF. Another problem for the DOW+ tax cuts can help =XOM, CVX

 

[trdes]

%%
I would not do it based off a [-20% correction off DOW/DIA] or 40ma monthly chart, which is about $ 270 on SPY.I use a 50 period ma more; IBD uses a 40 ma ................................
AS weak as DOW/DIA is ; I prefer a weaker group or ETF. Another problem for the DOW+ tax cuts can help =XOM, CVX

I was just being a smart ass with that comment. That was rude of me. My second post was more professional

 

[murray t turtle]

I was just being a smart ass with that comment. That was rude of me. My second post was more professional

%%
That 2nd part of his headline is more professional also;
SPY/S&P 500 is more professional/benchmark than DOW. LOL
However the way the media reports it, DOW is pretended to be more important.LOL