Nothing wrong with your thinking, but Bear markets are notorious for wiping out the bulls. There is a lot of complacency still and bottom picking in this area is increasing. Could be a perfect set-up for more disappointment.
If I may, I have just a few thoughts to add...There is no set amount a bear market has to decline. Is 55% enough? or do we need to see 90%? Nor is there a set time frame. In fact, another thought, while bear markets may not have lasted more than a year in the past, they have been known to trend no where for years on end. Also, rate cuts may have little effect for a while. For one thing, they tend to take an average of 6 months to begin showing an economic effect. And a little trivia....the FED cut rates 6 times in 1929 to no avail. While this is not 1929, the same scenario cannot be ruled out due to different factors. Remember, this market has come off a top that far exceeded the excesses created even back in 1929. Not to say that my thoughts are correct, but one must certainly examine both sides of the coin and always take it into consideration.
As a note, I am a bear, but I trade the market both ways, and find myself constantly evaluating bullish thoughts so I have several perspectives on the market. I also enjoy Rande's thoughts and I think there there is value to his "burst" theory of late as it fits right in with bear market action. I am putting extra caution in my trades recently because the volatility makes things a tad more difficult to read.
Good luck.
Velo |
