Determine Market Trend (11 Dec 15)

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-Wk High	Market Trend
Nasdaq 100	QQQ	-4.29%	Bull Market
Dow Jones 30	DIA	-4.65%	Bull Market
S&P 500	SPY	-4.81%	Bull Market
Russell 2000	IWM	-12.70%	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
Nasdaq 100	QQQ	110.79	108.51	Uptrend
Dow Jones 30	DIA	172.73	174.02	Downtrend
S&P 500	SPY	201.88	205.24	Downtrend
Russell 2000	IWM	111.91	119.89	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.