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Chances we are going into a full-blown bear market?

  1. I've been thinking of this as a (rather large) correction in an over-extended rally. But what are the chances we are going into a really long (months, years) bear market?

    Thanks.
     
  2. Nobody knows. But of greater interest, what would be your game-plan if this is the start of a years-long bear?
     
  3. Who has the crystal ball?
     
  4. Slaves predict Kings react, trade the tape.
     
  5. I generally agree,
    No one has a crystal ball...don't even try to predict the future, because that's essentially just gambling.
    Sometimes it pays off to have the gutsy, ballsy foresight gamble...but more often then not it will just hurt you overall.

    Basically, react to the market...trade what you see -- and the loose, general trend... is your friend.
    Don't overthink some things, some times. Don't think you know more than the market.
    Because the market...is part art, part science. and Miss Market is a bitchy, semi-unpredictable one too. or can be. o_O

    But more importantly, I made $5,000 today...High-Five` (cue the inspirational, happy, successful instrumental melody)
    Hoo-wah!

    If this bottom/reversal happens around 1pm EST, I just might make another 5K today
    Making those G's all day, everyday...and my Trading Academy will show you how to. with Real money this time, no more paper trading.
    I want a $2000 espresso machine, and $2000 alligator boots, and a $2000 laptop and $2000 headphones. -- i'm tired of living cheaply.
     
  6. As a citizen, I like it when markets are going up as it generally means the economy is doing well and people are building equity. As a trader, I could care less and just want to look for longs when it's going up and shorts when it's going down. As a day trader, I get both long and short signals most days.
     
  7. upload_2018-2-8_13-7-23.jpeg
     
  8. Look like US market is a bust
     
  9. i do not know and i do not care
     
  10. Well, I don't have much of a prediction, but I've been bearish since last Thursday. Hanging on to my winning puts and shorts with a target of their MA200 (which actually lines up nicely with SPX MA200). Looking for another 5-6% decline before next Friday. Will cry uncle if we breach the dead cat highs.

    Longer term, I'm still bullish, and next week will hopefully present some buying opportunities. Will bail quick if we breach MA200 with conviction. But I'll be buying as we round (what I think is) the bottom.
     
  11. "If this bottom/reversal happens around 1pm EST, I just might make another 5K today"


    Hahaha, I think you kinda-sorta called it lawrence!
     

  12. Thanks beerntrading. I suspect you are right that more downside to come. Hope you are wrong! :) But that doesn't sound illogical!!!
     
  13. I should say, I'm really bad at reading indexes or ETFs. Though usually pretty good when individual stock patterns are mirrored in the index itself.
     
  14. All the ETers bitching about lack of volatility those last few years must be happy at last.
    Do you actually manage to make money in those conditions ?
     
  15. IKR....and they all blowout on XIV because they thought it was never coming back. o_O

    ....and then they have no money left to play the volatility.
     
  16. Wait until 3 or 4 funds blow up and everyone on CNBC is tapping out then back up the truck . 2-3 years from now. That's a Hail Mary prediction lol.
     
  17. In my opinion, the good news for bulls is that the market is probably going to be excited to see what next quarter's earnings look like with all the new corporate tax rates, and stocks could drift higher as those earnings approach.

    The bad news is that stocks seem to be in a no-win situation - good economic data that would normally drive stocks higher, will now also be driving US-debt yields higher. This will be seen as a net-negative for equities, and stocks will be sold down until the market gets a feel for how well corporate America can handle 3-4% rates rather than 2-3% rates. The "bad news is good news because lower rates for longer" low-volatility narrative that we have gorged on since 2008 is dying a quick death here.

    The problem is the paradigm shift - Central Banks that have been loosening for the last 10 years have now shifted into tightening. There is no way around it. The market needs to find out if stocks like Amazon are really worth 300X earnings in a 5% cost of capital vs. the 2% cost-of-capital world, that they have enjoyed for the last decade - I suspect we will find that these high-flying stocks aren't worth that much. If so, many of them have a long way to fall.
     
  18. It's possible the US stock market is turning bearish for the next 3-9 months. I doubt it's turning bearish for the next 12 months, you just can't make that assertion based on current technicals. We'll have a better idea at the end of this month.
     
  19. SteveM, thanks very insightful. lovethetrade, thanks as well, please do update us one way or another what you think when we have a better idea at the end of the month.

    Dang, down over 4% on the DOW. Brutal.
     
  20. I spoke too soon, and broke my own trading rule...of thinking/Assuming...I'm smarter and know more than the market. :confused:
    That I know the future.
    Today, like alot of days, is basically...The Trend is your Friend.

    I should have waited, and whethered out the temporary upwards mini-storms.
    Those were relatively meaningless, small, vibrations/gyrations/tremors...and not the real thing trend.

    It's kind of amazing, how in hindsight, how crystal clear...and evident things are.
    If only you would have held your nerve, and remained calm. And stop overthinking and assuming.

    This is basically the same chart as yesterday. A fakeout recovery/finish upwards trend...then boom, it stayed and remained downwards.

    I'm not complaining either way, that my crystal ball is semi-broken...I still finished the day with a pocket full of cash.
    It's ok to be wrong on your initial judgement calls...so long as you're open-minded enough...to realize it, and still bank profits.

    The key...is to realize the key inflection points....from the meaningless gyrations.
    Change your perspective from a human on the ground...to a bird,...to a plane....to a spaceship...,to an extraterrestrial, -- and things will become very clear,
    2018
     
  21. It's impossible to predict the market based on technicals but the beauty of it is you don't need to.

    The only assertion I'd feel comfortable making is there's 50% probability the S&P Index stays below it's all-time high for the next 3 months. Other than that, it's pure speculation.
     
  22. Its not important what the market does in the months to come & has no bearing on my bottom line. Less experienced traders often struggle with not knowing with certainty what they will do next, yet they focus on trying to predict what the market will do next.
     
  23. Wow comagnum, VERY interesting chart. So.... short the VIX pretty darned soon?
     
  24. Comagnum's monthly VIX chart is fascinating to me. The market was so complacent lately, that this slight volatility wake-up was enough to send the VIX screaming higher to levels above the '98 Asian/LTCM crisis, the '98 Russian default and 9/11/01.

    We just witnessed a once-per-decade type of event - with no apparent catalyst. Simply amazing.
     

  25. 1. Why would it be impossible to predict the market using TA? Just because you can't....

    2. It is impossible to give odds like you did to market events. There is simply no way to assign and odds whatsoever.
     
  26. Predicting is pointless because you'll do what the market tells you to do anyway.

    I agree, it's pointless to give odds, it was simply to highlight the fact that looking even further into future is even more pointless.
     
  27. I seriously doubt that we are seeing the beginning of a long bear market. The two greatest boosts to the earnings of US companies in years are the reduction of the corporate tax rate, and the reduced tax in repatriating earnings. Yet stocks today are cheaper than before the law was passed. Plus recent earnings releases have been positive, and worldwide economic climate is good. Once traders get past their fears of possibly higher interest rates and inflation, I expect stock prices to rise.
     
  28. do you feel fear on the street like in 2007?

    President T is going to have his parade to show to Kim Jong Un he has bigger button than that impoverished king.

    [​IMG]
     
  29. +1

    CM
     
  30. Interesting you labeled the current spike "Trump". Also interesting the level is already on par with past spike. If history and human nature are any guide, this thing will take a little more time to damp out.
     
  31. Yea, I really meant to put Trump with a question ? There were other things happening at the same time besides Trump state of the nation speech, like the 10 year yield spiking up, Greenspan's bubble comments, and the Fed set to raise interest 2-3 times this year. Not sure how to label it yet.
     
  32. And earnings season. It was pretty disappointing. Lots of people overlooking this one. While the bearishness started market-wide on 1/31 (or even 1/25, you could argue), there were three huge earnings drops between market hours on 2/1-2/2. While the last bulls were getting shaken out from the earnings season, AAPL released and lowered guidance, and CVX and XOM missed. On their own not hugely significant. But taken together, I consider those three releases to be where bulls rolled over.

    It also gives us good cause for continued bullishness--now market value is more in line with earnings-based valuations trends.

    (and reading back to you other post for context, came across someone quoting my post from Thursday)

    Haha...what a difference 1 day can make--if anyone caught the buying frenzy in my journal yesterday. Thursday night I knew we had a big day coming up so I spent hours going over charts and devising a plan for Friday. Ended up finessing my target up a bit from 2500 to 2525 (which was only about 4.4% from the 2640-ish when I made that post). Knew the bottom when I saw it though.
     
  33. There is a good chance we will enter a bear market or some variations thereof. I'm a short term intraday to swing trader. I'm not so good with long term predictions. Nor anyone out there.

    But if I were to sit back and theorize a bit, I think this could be a long-term top. It has the look of a classic blowoff top. It doesn't mean it will crash on Monday or anything. But volatility is here to stay.

    There will be more days with a 1000pts+ drops and rises. I wouldn't be surprised with a 5000 pts drop one day in the future. And a 3000 pts rise someday in the future. It's because we are at such elevated levels. Percentages is what people should be looking at not just Dow index points.

    We have gone straight up since 2009. Geez. There has to be some corrections. Some people will want to take money off the table. In 20 years, yes, the market will be higher than they are now. Markets always go up in any 20 years window timeframe. Assuming the world doesn't blow by then. hehe.

    If I were a long term investors, then I would say the next few years can be flat to downish...

    But I only trade what I see intraday. None of this long-term matters to me. I guess in my 401k it matters. But I sold out my equity funds in Nov 2017 already and parked in short term safe bonds. I'll buy back equities in my 401K when things seem to bottom out...

    Again, who knows. No one knows. Just trade and go with the flow is the best suggestion.
     
  34. next to zero I would say, unless a full-on dump of Federal dollars into an economy near full employment is "different this time."

    On the other hand, a dampened, more subdued equities market for the next few quarters, would be perfectly in order. The cynic in me makes me want to think that won't happen with a Mid-term coming up.
     
  35. There is no reason to predict a bear market is likely at this point.
     
  36. %%
    Looks like GE, downtrend, except it has been going down more , longer + stronger down . Tech stuff like QQQ... nice uptrend again/200 dma .:cool::cool: NOT a prediction