Tag Archives: Bear market

If this a an average bear market we will se it bounce very soon

It has been a brutal stock sell off in December and so far in 2019, and MSM is telling you that we are officially in a bear market. It seems like the market is pricing in a recession, but it can be too early to say so.

The 10-year Treasury remain below 3 percent and the FED shouldn`t raise rates for the 10th time in 2019. If they push the hold button, I think the market will be happy and bullish again. Just look at the healthy job market and the strength of the U.S economy.

December 2018 was the worst December for the Dow since 1931, but if we avoid a recession I think investors are lucky to have a lot of cheap stocks. It is a China-U.S trade war, and the global economy is in a growth slowdown, but that doesn`t automatically mean recession.

We can see a support for the S&P 500 very soon, and this is also a point were investors pay for their insurance. And that is also a point were the bear market ends. Technical analysis tells us that if this is the right thing right now, a drop to around 2,300 points would likely spark a bounce from here.

Statistically, the average bear market stops right after, or right before it officially began. It remain to see that this is happening again. A closer look at the 48-month SMA, the market failed to bounce in August 2008 which led to the biggest drop since the Great Depression. The same happened in 2001.

Is this drop a new 2001 or 2008? If not, we can see a support just like it did in 1987, 1990 and 2016. The S&P 500 has lost 20,2 percent, and the Dow is down 19,4 percent, while Nasdaq is down 23,9 percent. The Russell 2000 is down 27,3 percent, so the coming days will be interesting. Anyway; this a great moment for day traders.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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We are 1% from a bear market

I started day one this year with this simple words: «And now we welcome the new year. Full of things that have never been». We are finished with just one month of the year 2016, and so far we have seen a lot of things that have never been. Is it more to come?

Yes, I think so. I think 2016 will be full of surprises. The start of the new year have been brutal, but we are not in a bear market yet. Nasdaq slid -1,82% on Monday and we are now about 1% from entering a bear market.

Warningbear

The stock market need to fall more than 20% to be called a bear market. Otherwise it is just a correction. S&P 500 and the Dow peaked in May last year. Nasdaq peaked in July 2015, so it`s long time since the top. The spread has warned us in months.

As you may know, we are now entering a critical moment. But what`s holding the market up is the blue chips. Big companies can go up while many small companies can go down at the same time, and that can make the index go up.

The Dow consist of thirty leading companies, and are a price-weighted index. Stocks with high prices count for more than stocks with low prices. The index goes up if stocks with high prices are doing it better than stocks with low prices.

It`s different with Nasdaq, which consist of a hundreds of stocks and most of them are in the tech sector. Nasdaq is not price-weighted, but a capitalization-weighted index, which means the most valued companies like Alphabet and Apple count for more than smaller companies.

It`s easy to be blind if you only look at growth-stocks like Alphabet and Facebook. They are both big, but if you look at the Russel 2000 index, which is an index of small-cap and medium-cap stocks, it is different. That market is more nervous, because small and medium-cap stocks is more risky than blue chips.

Bullish investors argue that most of the bad news is already baked into the market, and if the carnage we have seen so far this year is a correction, we will se the market bounce back very soon. I will follow the oil price, what happens in China and the Fed the coming days. Fed Chair Yellen testifies on Wednesday and Thursday.

We are not in a recession and many institutional investors are closely watching the economy for any sign of negative GDP. We are not there now, but we are close. What we see is a decline in companies earnings. Big buyers are patient and will jump in once the correction is over. If not they will hit the panic-button.

2016 will be the year of change.

wallboard

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Is this the end of the bull market?

Gold is up +0,61% to $1,311,40, and Silver is up +1,02% to $20,11. Crude oil (brent) is up +0,52% to $106,37. Copper is down -0,03% to $303,85. It`s all red in the Euro Zone today, while the indices are little changed.

Spx

(Chart: S&P 500 Index)

Nikkei slid to a two-week low today. The Japanese shares fell 1,4%. The BOJ (Bank of Japan) stood pat on policy after a 2-day meeting, and gains in the yen also hurt the sentiment. It was mixed in the Asian markets today.

Dow seems to open up today, while S&P 500 open in a red territory. EUR/USD is trading at 1,3762. Up + 0,17%. Sectors: Telecoms is down -0,78%. Financials is down -0,43%, while the Energy sector is up +0,02%.

Some investors are scared and want to take some profits now. Other investors see opportunities like some talking heads at CNBC. They belive a «bear case» is almost impossible based on the job data and other economic numbers.

It`s difficult to predict the next move in the market. Other investors say that the stock exchange is more like a casino right now. All driven by robots. Nobody knows where the Easter Bunny will jump!

Reports today:

10:00 a.m EST JOLTS Job Openings
01:30 a.m EST FOMC Member Kocherlakota Speaks
02:45 a.m EST FOMC Member Plosser Speaks

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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