Date: August 12, 2019

Nope. Not a Bear Market

As I continue to write about, while much or most of the price damage should be over, day to day volatility is not. Worries have shifted from tariffs and a trade war to civil unrest in Hong Kong which is also associated with China. Remember, regardless of the situation, there is always, always, always “major” news surrounding a market’s attempt to bottom. That’s just how it is.

It seems like every single time stocks pullback at least 5%, I get hit with questions and proclamations about the bull market being over. The bears start pounding their chests and telling me how wrong I am while the bulls get anxious and worry about the downside. Then the bottom comes. I haven’t wavered once in 10 years that I thought higher prices would result from whatever decline was unfolding and I am not changing that tune here.

The data do not support a bear market beginning.

However, that doesn’t mean that one is impossible, just very unlikely. I will be doing my canaries in the coal mine issue of Street$marts shortly to review the various markers for a bear market to begin. For now, as I mentioned on Making Money with Charles Payne last week, I think last week’s lows represent much or most of the price damage for this pullback although I would not rule out a quick breach of those levels later this month.


Paul Schatz, President, Heritage Capital