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How To Recognize A Bear Market Bottom

May 08, 2020 2:00 PM ETCARR, DIA, IWM, NCLH, NLY, NLY.PD, NLY.PF, NLY.PG, NLY.PI, OKE, PK, QQQ, SMA, SPY, TPH151 Comments
John Gilluly profile picture
John Gilluly


  • Specific statistical signals accompany bear markets.
  • These signals occur in a sequence.
  • Each one of these signals has been met in the March/April bear market, followed by one of the strongest rebound-rallies ever.

Bear Market
blackred/E+ via Getty Images

In his classic book, The Reminiscences of a Stock Operator, Jesse Livermore opined that his greatest discovery was understanding the importance of market direction. He had experienced a few surprise losses after he thought he had

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John Gilluly profile picture
I have invested for 33 years. I only write articles for Seeking Alpha when I think that there is something timely to invest in. I look for opportunities in mispriced assets that are temporarily out of favor. These investments can be very short term to long term, depending on the primary trend of the market. ***Sentiment indicators factor significantly into my choices. I combine them with simple technical studies before I trade. The entry-point, its original trade date and time, has an enormous effect on the efficacy of an investment over time. ***I have found that determining and following the primary trend of the market (in all time frames) is the key to successful investing: to be bullish when it is time to be bullish, and bearish when it is time to be bearish. ***Fundamental analysis may be good training for the mind in assessing worthy companies, but it is not the primary reason that investors buy and sell stocks. ***Like captains who steer their boats across the waves of the sea, wise investors carefully observe the movements in the water beneath them. A favorable trend can literally pull you along.***In commenting on such timeliness, Shakespeare once wrote, "There is a tide in the affairs of men, Which (when) taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat. And we must take the current when it serves, or lose our ventures."

Analyst’s Disclosure: I/we have a beneficial long position in the shares of CARR, TPH, NLY, OKE, NCLH either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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