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Watching for the New Bear Market

March 4, 2013 – 6:04 pm

imagessMonday and Tuesday of last week the market began the expected correction but reversed itself on Wednesday and Thursday. The uncertainty could be blamed on the Sequestration issue coming out of Washington but with four months in a row with the market in positive territory a correction should happen regardless of any other considerations.

Corrections are normal and health-restoring to every bull market. They can be as low as a few percentage points and as high as 15 to 20%. Anything over 20% is a new bear market. The normal correction is about 10%.

Any correction in the market is a reason to enter the market not exit. The difficult task is separating corrections from the beginnings of a new bear market. It is hard to believe currently, with economic statistics improving, that we are entering bear market territory.

The dreaded ‘Bear Market’ is coming and there are signs that should give us clues as to its approach, but not yet.

Good Trading
Steve Peasley

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