Three Major Indices are Approaching Bear Market Status

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.
[two bears]

The Three Bears Have Arrived

There’s no Goldilocks in the markets right now. There are only the three bears — and those bears are growling with ferocity.

Although not technically in a bear market in terms of percentage off the recent high, my benchmark for what I consider a market trouncing into bear territory is the 200-day moving average.

This is the benchmark technical indicator that my dad, Dick Fabian, taught me to pay the most attention to, as it is the key breaking point to determine when you should be in stocks — and more importantly, when you should be out of stocks.

To this day, the 200-day moving average largely determines how we make decisions in the Successful ETF Investing newsletter.

If we look at what’s happened in the markets during the past week, we now see that the 200-day moving average has been breached with conviction in all three major indices — the Dow, S&P 500 and the NASDAQ Composite.

The charts below of each respective market tell the tale of woe better than any verbiage can.

INDU_082115

SPX_082115

COMPQ_082115

As you can see, the major indices haven’t been below the 200-day moving average since October 2014.

This definitely means the bears have set up camp on Wall Street.

Of course, the positive spin here is that after stocks got smacked down in that October tumble, they embarked on a 10-month bull market run that kept investors feeling really good — at least up until this week.

While we don’t know how long the current conditions will last, we do know that the market is replete with uncertainty here.

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That uncertainty is largely due to China and its ability to keep up its economic growth targets; how China will affect the rest of the emerging markets and the commodities markets; and particularly how the unknown of when and/or if the Fed is going to raise interest rates in September or sometime this year.

Given all the market has to deal with right now, I am glad that cash is king in terms of my Successful ETF Investing newsletter recommendations.

If you want to know what to do right now, and just as importantly, if you want to know when it’s time to put cash to work, I invite you to check out Successful ETF Investing today!

Glorious You

Come on now if we all pull together
We can lift up the weight of the world from your shoulders
Lift up the weight of the world from your shoulders
Just for a moment or two
And be glorious you

— Frank Turner, “Glorious You”

The folk rocker’s lyrics tend to be both raw and celebratory, especially in the face of adverse circumstances. In his song “Glorious You,” Turner reminds us that when we all put our intentions together we can change the world — and we can be glorious.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow Weekly ETF Report readers, send it to me, along with any comments, questions and suggestions you have about my audio podcast, newsletters, seminars or anything else. Ask Doug.

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In case you missed it, I encourage you to read my e-letter column from last week about how currency manipulators are impacting the global market. I also invite you to comment in the space provided below.

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