Corona, Ca December 17, 2015  Bear Market – what is a bear market and are we in a bear market?

With the Fed raising rates by .25% this past Thursday I have received many questions about this supposed bear market that the US. First let’s look at the S&P500 emini futures.

BEAR MARKET Occurs when:

A bear market occurs when the market stays below a 20% move from the swing highs.

On this daily chart, we can see the high was 2100. If we take off 20% from the high the price the market would have to stay below is 420 points lower around 1680.

When Will a bear market occur?

A bear market will occur when we are below the 20% drop in the market from its high.

Presently, the buyers are still in control to the blue zone where sellers will have to be in control to keep direction moving us towards the Next blue zone around 1700.

The market is in a consolidated range.  We are in a 200 point range where price is looking for a commitment to either move higher or lower.  Our present pattern is buyers are in control so we would be a buyer of dips, until price breaks below 1960 where sellers are in control for the short term.

Gold is in a Bear Market

Gold is in a bear Market

If you look at a 20% decrease in the price of gold from 1900, then price below 1500 will be in a bear market.

Price has been below $1500 since April 2013.  We don’t know when it will change direction and become bullish, but as US debt increases many of the “Gold Bugs” believe it is bottoming.

Technically, gold looks like it still has a little bit more to go and could break the psychological $1000 an ounce soon.