Trading a bear market

[smallfil]

This is a huge opportunity to make a lot of monies. First, on the short side. Then, when it hits the bottom, on the long side----keep your powder dry. Have some capital to invest when there are a lot of cheap good stocks to buy.

 

[KGTrader4]

Its so tempting to buy anticipating a countertrend rally, i am only 30% equity and have been for a while, lowest ever in my adult life. But whats stopping me is this chart of SPX, red line is the 200 day EMA, green is the 50 day.I just cant do it, better not to catch a falling knife and try to pick a bottom, that doesnt end well....

 

[KGTrader4]

Besides being so far below the 200 day, we are seeing the Death Cross. Not always a reliable indicator, but shows short term trend aint conducive to a long trade

 

[smallfil]

Besides being so far below the 200 day, we are seeing the Death Cross. Not always a reliable indicator, but shows short term trend aint conducive to a long trade

Long ways to go. Just saying, keep your powder dry. Have capital ready to invest when the time comes. Lots of bargain stocks when the huge selloff ends.

 

[KGTrader4]

Long ways to go. Just saying, keep your powder dry. Have capital ready to invest when the time comes. Lots of bargain stocks when the huge selloff ends.

Thats where my head is right now.
Of course the problem is that they dont ring a bell when we are at the bottom

Art Cashin "when the VIX hits 40 coupled with a 90% down volume day"

 

[smallfil]

Thats where my head is right now.
Of course the problem is that they dont ring a bell when we are at the bottom

Art Cashin "when the VIX hits 40 coupled with a 90% down volume day"

No. They don't but, there are clues. One is stocks stop dropping and consolidate. If stocks are not dropping but, staying flat, big boys are probably, buying the stock. Think about it. Who is holding the stock prices up, when most retail traders have lost most of their monies? Without that buying, stocks will continue to tank and go even lower. So, hedge funds keep buying stock at cheap price levels. Most retail traders have lost their monies and have little monies left to invest, aside from cowering in fear? This market cycle happens in all stocks.

 

[murray t turtle]

Really; I find that risk control is much tougher when shorting.
All I can lose buying a stock is my initial investment. My losses short are unlimited.

I learned a valuable lesson when a stock I had shorted got bought out at a premium to the price it was trading at that was much higher than my stop.

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Good points\
it is more disorderly, mostly. Even with a somewhat orderly bear move with SH.....................[No leverage \bear move on SPY\S&P500]
IBD founder shorted many of his longs/top trenders, that could be an advantage to that. Overall he did super well, not most 7 i think,7 bear markets. But he lived so many years he will always have a different view from most traders...
BUT wilder trend stuff[SOXS......] can be much harder to hold on to a profit/much different from most longs or even somewhat more orderly ETFs. NOT a prediction.

 

[smallfil]

%%
Good points\
it is more disorderly, mostly. Even with a somewhat orderly bear move with SH.....................[No leverage \bear move on SPY\S&P500]
IBD founder shorted many of his longs/top trenders, that could be an advantage to that. Overall he did super well, not most 7 i think,7 bear markets. But he lived so many years he will always have a different view from most traders...
BUT wilder trend stuff[SOXS......] can be much harder to hold on to a profit/much different from most longs or even somewhat more orderly ETFs. NOT a prediction.

From Mark Minervini's book, Trade Like A Champion, he said the top leaders when it changes direction and goes down, usually, goes down 50%-80%. Add Victor Sperandeo's 1, 2, 3 pattern and 2B pattern and you very potent tools to short the stockmarket. With put options, of course to limit any losses if you end up being wrong.