Chart via WSJ


I have no idea where idea that “20%” somehow defines a bear market, or where it came from.

In my mind, I prefer to think of this in the context of trends. Is any market moving from lower left to upper right of the chart? That is a bull market. If the move is from upper left to lower right, its a bear market. Anything in between is a trading range.

Hence, from the recent highs back in April to today, the overall trend has been down.

Following Fridays 90/90 day, we should expect a rally to last 4-7 days, before resuming the prior trend (lower).

If we could see a 5-7% move higher, I would be looking to further lighten up my 50% exposure to equities.

Category: Philosophy, Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

7 Responses to “Da Bears . . .”

  1. Doofus says:

    I have never agreed with the tense used in the MSM when describing “bear” and “bull” markets. The explanations shown in the WSJ graphic use faulty language.

    Something like this is marginally better: “A bear market *is occurring while* asset prices fall 20% from their previous peak”. Or: “A bull market *has occurred* because we have seen asset prices rise 20% from their recent lows”.

    Lazy language, conceptual cloudiness.

  2. Yes! THIS is why I want to be in the market and have my systems fine tuned for when the shorts turn tail and run. Short covering has to be one of the biggest money earners on the market if it can be captured

    Seeking that grail (though I dare not call it holy)

  3. Ssembonge says:

    “If we could see a 5-7% move higher, I would be looking to further lighten up my 50% exposure to equities.”

    No wonder you have been bullish, or at least biased in your commentary.

    Does this mean you’ve lost hope of QE3 or you are tired of waiting?

  4. nofoulsontheplayground says:

    The equity put/call ratio was at 0.68 just a day after a spike low. That suggests this bounce is going to run out of steam very soon and reverse.

  5. AlaskanPete says:

    You have a 50% equity exposure in this environment, when you yourself are giving a 60% recession probability? Where is the risk/reward calculation for that genius move?

    Maybe you need to step back from the ego-stroking media clownshow and concentrate on your core business of managing your clients’ money.

  6. bear_in_mind says:

    BR: “…I would be looking to further lighten up my 50% exposure to equities.”

    Well, especially in light of the fact you’ll be at the TBP Conference next week. That counts as “traveling”, doesn’t it? We all know Mr. Market doesn’t take kindly to you being away for very long. ;-)

    For those of us who couldn’t make the trek, we look forward to you sharing a few nibbles and treats in the coming months. Sure it’ll be a bang-up affair!!

  7. [...] mentioned last week that I believed we were due for a rally lasting 4-7 days, and a move 5-7% [...]