3Xtraders : The Biggest Market Rallies Happen In Bear Markets

Thursday, November 16, 2023

The Biggest Market Rallies Happen In Bear Markets

I thought this was common knowledge, until I saw this tweet yesterday

97% of the stocks in the S&P 600 (small caps) closed green yesterday.

That was the best day in 12 years.

You rarely see days like this in a bear market. This was more than 'just a bear market rally' like they are telling us. pic.twitter.com/P1b7VtdjYs
— Ryan Detrick, CMT (@RyanDetrick) November 15, 2023

When I see the number of likes on a tweet like that, I'm left asking myself, "is the average investor really this dumb"?

I don't know what his motivation for spreading false information is, but all you have to do is look back at the bear market rally of 2020, to see a comparison...

$FRCSX - Small Cap Fund - for example

$SML S&P 600 Small Cap Index - for comparison. Nearly identical!

Granted, it's a welcome rally, but nothing compares to the rally we saw coming out of the bear market of 2020, or the one coming out of the bear market of 2008, for that matter.

For this reason I'm always looking forward to the next market crash, because they make for the best investment opportunities.

$SML - DCS View - Looks like the bears aren't giving up that easily.

As far as the short term trade, I'm trying to sit on my hands for the next couple of days as we trade into Options Expiration, because I suspect the bulls are keeping their power dry...

The Street is already calling the market "near overbought". Nice of them to warn the average investor, before taking the market down again, but to be honest, I'm not sure when...