A bear market is when the trend of the market is down. Calling a ‘bear market’ is a leading indication of a current trend, not a statement of a past trend once most or all of it has run its course.
Without doubt the market, according to the chart, will either go up, down or sideways and definitely not right to left. This was a trading joke amongst the crew back when I used to play that harsh game. But like most jokes there is a seed of truth to them that can prove useful.
So we can definitely discount that the market will suddenly go backwards. Can we discount it going up this year too? I think we can, so far as we are not in a bull market any more.
This means we are in a bear and I’ve been banking on a sharp crash. However, there is another eventuality. A sideways market.
So could we be in a bear market rather than in a market about to crash?
Firstly, I feel an important definition needs to be uncorrupted. That definition is "bear market." The muppets on TV have destroyed the meaning of ‘bear market’ by changing the meaning to be ‘a market that has fallen over 20%.‘ This definition is not only wrong it is meaningless, as far as being a diagnostic.
“The market has entered bear territory today as it has now fallen 20% from the high,” is not correct. It is also a pointless statement. A bear market is when the trend of the market is down. Calling a ‘bear market’ is a leading indication of a current trend, not a statement of a past trend once most or all of it has run its course. Saying the market has fallen 20% and is now a bear market is like issuing a storm warning after a town has been hit by a tornado.
"Bear market" is not a statement of hindsight it is a statement of current trend. It’s the difference between saying, "Run, a bear is coming!’ and pronouncing, "A bear killed that guy."
There's quite a bit more.
