Bull Market,
Pullback, Correction and Bear Market
(1) Pullback: -5%
off 52W High (2) Correction: -10% off
52W High (3) Bear Market: -20% off 52W
High
Benchmark
|
Symbol
|
% off 52-Week
High
|
Market
Trend
|
S&P 500
|
SPY
|
-9.06%
|
Pullback
|
Nasdaq 100
|
QQQ
|
-10.03%
|
Correction
|
Dow Jones 30
|
DIA
|
-10.38%
|
Correction
|
Russell 2000
|
IWM
|
-13.32%
|
Correction
|
Traders who strive for
consistency—their goal is to make money in all market environments. Knowing whether you are in Bull Market, Bear
Market or a Flat Market is equally important and key in assessing the potential
for your trade.
Long Term
Trend
The “big dog” of moving averages
is the 200-day moving average. If the
index is trading above that level, the long-term trend is considered up;
generally, the 200-day moving average is seen as a proxy for the long-term
trend.
Benchmark
|
Symbol
|
Price
|
200-DMA
|
Market
Trend
|
Dow Jones 30
|
DIA
|
162.88
|
174.62
|
Downtrend
|
S&P 500
|
SPY
|
192.87
|
204.57
|
Downtrend
|
Nasdaq 100
|
QQQ
|
102.92
|
106.41
|
Downtrend
|
Russell 2000
|
IWM
|
111.42
|
120.42
|
Downtrend
|
In an up-trending market, I will lengthen holding times and give my holdings more room to run. In a wide trading range or a down-trending market, I use short holding times and grab profits quickly.