Now What?

I can't believe people seem excited by the market "only" loosing a percent today. Sure it was down much more than that at the open, but should we be happy that things are less gloomy than we originally thought? I'm thinking no.

This monthly chart of the S&P 500 is indicating that we are in a bear market. Until that price line rises above the 20 month moving average, things are going to be tough.

I have to admit, despite the carnage, I had a hard time watching some stocks come back from 10% losses and actually make 10% today. But I think this ugliness has a ways more to go, and so far this month I haven't done well when things are ugly.

My plan is to sit things out unless I absolutely have to buy a stock or two--just for my sanity. I'm going to concentrate on just a few stocks per week (5 to 10) and only buy ones if they fit some stringent criteria. It just isn't going to work for me to buy a basket of stocks and take my lumps. I'll have to wait for a turnaround to do that. It will come, but I don't think it will be very soon.

Jubak has a good article on preparing for the coming bear market.