June there was no question we were full on in bear market mode. Then in July we saw a big bounce for the market. The question at this critical juncture is whether it is just another…
bear market rally that fritters away or have we truly found bottom with a new bull market emerging???
This is the most critical topic for all investors to grapple with at this time. And thus will be the focus of this week’s EXTENDED commentary.
My last commentary on 7/20 was appropriately titled “Investors: Do You Have the Patience to Weather THIS Bear Market?“. This was an honest assessment of the tricky nature of bear markets and where we stood at the time bouncing back from the recent lows.
However, I also knew that I would miss 2 weeks of commentary as my family went on an Alaskan cruise. So this was message about patience seemed like the appropriate topic for the days ahead.
(By the way, Alaska is definitely a bucket list trip. But in our case 4 out of 9 in our party got covid including yours truly. Yes, that dampened the mood, but don’t worry, all are fully on the mend. The best part is that all the weight I gained at the buffet has already been sweated out by the gallon every night in bed 😉
Back to the topic at hand…
Indeed the Market Gods are testing all of our patience as the stocks keep creeping higher and higher. So this commentary is meant to provide an honest and complete assessment of where we stand now and contingency plans for how we move forward. (meaning it’s a loooooong read)
For those that want the get to the punchline. I still strongly believe that this is a bear market rally and have tons of good evidence to back this up. And that the gains so far are VERY typical of these “suckers rallies” just before dumping back down to new lows.
HOWEVER, I also admit that it could be the start of the next bull. Much less likely, but still a possibility that we have to plan for…which we will.
Thus, to help me in this vital endeavor of whether to stay bearish or switch to bullish I am going beyond my typical focus on just the fundamentals to also rely upon the best market timing indicator on the planet. I am referring to the time tested models from my friends at TheDowTheory.com.
I will share more info on that later…but spoiler alert…they see the current bounce as nothing out of the norm for a bear market. So their signals are all…
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