Bear Market Buzz Builds As Stock Market Grows More Unpredictable
Talk of a bear market (depressed stock market) has been circulating for most of 2010. However, considering the intense instability in the stock market throughout the month of May, analysts have yet to make that conclusion. Some say the bear signals do not represent a stock market crash, but simply stock market correction 2010. Others say the market has already turned inside out and can't get any worse. One thing everyone seems to see eye to eye on is the fact that no one really knows whether the bull market that began in March 2009 is about to end.
Source of Article: Bear market buzz builds as stock market grows more unpredictable
Is a new bear market approaching?
As early as January this year the bear market buzz began when marketwatch.com reported on the Elliott Wave Financial Forecast. The bear market would return in full force in 2010, according to the Elliot Wave. The Elliot Wave successfully called the 2008 stock market crash and the 2009 stock market rebound. It brought to comparison the situation and a brief stock market bounce after the first stock market crash in 1929 and forecasted a similar collapse. Author of the Dow Theory Letter Richard Russell and other investment gurus like him have also predicted a stock market crash and advised clients to get liquid for quick cash. The market tanks and rebounds depending on the news of the hour, and that has not appear to be a consistently profitable position.
The stock market correction 2010
The bear market buzz is easy to comprehend, considering the confluence of recent events such as the European debt crisis, Flash Crash, the financial reform bill and the latest news on the oil spill in the Gulf of Mexico. Many investors are now lacking confidence. However, reporting on MSN, Anthony Mirhaydari said a new bear market isn't just around the corner. According to him, long-term breadth, global economic growth, earnings and interest rates all suggest that higher highs are ahead for stocks. In addition, as part of a long-term bull market, there is historical pattern for a correction of the magnitude that took place in May.
Stock market volatility – is it just an overreaction?
Stoking high fear index in the stock market were recent events like the May 6 Flash Crash. And the European debt crisis has been a wakeup call for investors. But the new bear market buzz is overblown said Phil Dow, director of equity strategy RBC Capital Markets in Minneapolis, in an interview with CNNMoney.com. Some hard hit stocks have been oversold as fear among investors continues to grow. A clear sign that investors overreacted to the European debt crisis was May's stampede into the U.S. Treasuries. Dow told CNNMoney.com that energy, tech and health care stocks could be due for a comeback once investors realize that new bear market fears may just be stock market correction 2010.
Nimble traders thrive on volatility
It's normal to expect some sort of a bear market given the duration of the present bull market, according to tradingmarkets.com. A correction in the S and P 500, from 5 percent to 10 percent, is normal, and it's a good thing when it happens because it helps restore the market back to health. In addition, the best trading opportunities, regardless of how long or short, often arise during market corrections. And nimble investors could find many opportunities to make money as volatility is expected to increase further before it subsides.
Tags: bear market, flash crash, quick cash, stock market