I have stated before that I was working in a bear market context. I still do until the conditions described at the end of this post are met.
If I were to take the previous bear market (07-09) rallies as a guide, I would expect steep corrections to punctuate the current one as soon as the market becomes overbought. However, it doesn't happen; corrections are small in length and duration.
So I looked to the 00-03 bear for more info and I found that bear market rallies can go up without big corrections:
- April-May 2001:
- September-December 2001:
In conclusion, nowadays market behavior is not unusual. The market can go up in a sustained rhythm. In fact it usually does reach levels beyond the expectations of the average bear.
This is why I do not like targets. I usually monitor the condition of the market as it moves and determine when it is time to act. For now, it is not there yet but it is getting close.
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