No matter what your individual opinions are, the will of the free market is going to reign in, whether you like it or not. All an individual can do is to respect the rules of the market and play by the merits of it. Understanding the market is the first step to play "the market" game and particularly, the bear market is of greater importance because that is where most people get hurt.
The chart of a primary bear market exhibits a certain pattern most of the times. A primary downturn usually exhibits 3 phases. More at:
http://creating-wealth.blogspot.com/2007/07/bear-market-behavior.html
Submitted: Jul 28, 2007
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Comments Received:
I disagree that we are in a bear market. The market may be taking a pause and digesting some of the spectacular gains of the last six months, but there's no way it's a bear. How do I know? Because real-estate hasn't finished its fall. There is a massive asset rotation shift going on here between real estate and the stock market. It happened in 2001 and real estate benefited. It is now happening in the opposite direction and the market will benefit. Remember, in the end, the only thing that makes the market go up is the amount of money out there willing to buy stock. Right now, there's an awful lot of money.
Posted: Jul 29, 2007
It is much too early to call this a bear market. So far it has been a four day correction. With earnings so strong, I am betting that the is just a culling of the weak hands.
Posted: Jul 29, 2007
Sam, JDonahue,
Thanks for your feedback. I should have clarified that my interpretation of the "Bear" word was to mean as "CORRECTION" rather than as a "Recession". I added this correction to the article.
I too do not think that we are in a recession; at least we do not have evidence of recession. There are sub-prime problems and growth might be slowing (actually Q2 GDP was surprisingly higher), but we are not in a recession.
Nidhi
Posted: Jul 29, 2007
Yes, I think correction is probably more accurate although none of us really know. But I do think the market will go back up. I guess we'll see. Thanks.
Posted: Jul 30, 2007
I am thinking that what we are witnessing today (8/16) is the phase 2 of the correction (or a bear market??). Pretty soon we will be getting used to this bad news and once all the bad news is exhausted, we should see some ascend in the indicies.
Nidhi
http://creating-wealth.blogspot.com/
Posted: Aug 16, 2007