Is the Bear Market Rally Over?
Is the bear market rally ending or a new bull market starting?
Image from Carlos’ charting platform.
What is a bear market?
A bear market occurs when major stock market indexes decline 20% from their peak. The S&P 500 made its high at the beginning of 2022 and officially fell 24.5% in June.
However, the S&P 500 rallied about 18% from its bottom as of 8/14/2022. A technical bull market does not start until we increase at least 20% from the bottom.
This rally has investors wondering if a new bull market is starting or if it's just the end of a bear market rally.
Are we in a bear market in 2022?
Technically we are in a bear market in 2022.
Until the S&P 500 increases at least 20% from the bottom, we are not in a technical bull market.
What is a bear market rally?
A bear market rally occurs when stock prices have a short-term rebound amid a long-term bear market.
Hedge funds covering short positions and retail traders buying into stocks after price increases are the leading causes of a bear market rally.
Is the bear market rally over?
None of us can accurately predict what the stock market will do, but there are various tools and technical analyses we can perform. HaiKhuu Trader Carlos is a wizard with his storytelling and technical analysis abilities.
Last week, a broad market rally pushed the S&P500 over critical levels; but will it hold?
In our new YouTube video, HaiKhuu Trader Carlos gives his technical analysis on SPY, shows historical data on the market, and provides thoughts on whether we will have a retracement.
Should I wait for stocks to bottom to buy?
The short answer to this common question is no. You will miss the bottom if you try to time the market and therefore miss out on gains if you wait for stocks to bottom before buying.
As demonstrated in the video, even if you bought at the market peak each year, you still performed better than the guy waiting for stocks to drop.
Dollar-cost averaging into solid companies and broad market ETFs is the best way to invest your money in a bear market rally. Of course, you should plan on holding your stock investments for multiple years in case the market drops again.
If you are interested in joining an amazing trading community, you can join the HaiKhuu Trading Discord for free!
