Look Out Below

There can be little doubt that the American equities are in an extended bear market. I am not a big technical analyst but technical analysts would tell us that in order to make a bottom in a bear market it is likely that there would be an extended rally, during which as much or more than half of the previous losses would be regained, followed by a resumption of the down trend that would test but not go too much deeper than the previous lows. For months now, since experiencing the lows this fall, the market seems to have been trying to rally but has not had the strength to do so in any substantial way.

This leads me to believe that the equities markets have not truly reached the lows that they ultimately seek. This seems to be borne out by the fact that the economic news continues to be all bad, with no light or promise of light at the end of the tunnel.

I look for the equities markets to continue their nosedive through the previous lows for continued and substantial losses before again trying to establish a baseline low. This may happen soon or later in the Spring. I do not expect a substantial rally at this time. Do you?