Although we are not technically in a bear market, the action today was a good illustration of what one looks like. The market opened poorly and managed to bounce but the strength was used as an opportunity to sell and the close was very weak. Breadth was very ugly, with 3,600 decliners to 1,800 advancers, and if you were looking for some pockets of leadership or momentum, you would have a very hard time. Even the mighty Apple (AAPL), which has been under relentless pressure, couldn't hold a bounce again.
The folks trying to predict a market turn were again proven wrong and have more losses to show for their efforts. Their arguments may sound convincing, but until the market starts to care, it doesn't much matter how brilliant the bullish arguments are stated.
I am going to continue to repeat what I've been saying lately: We should simply stand aside and wait for the market action to improve before we put our money at risk. The goal isn't to call the low but to buy when you have the best chance of catching some momentum and making some money.
I don't have much patience with those market pundits who keep trying to convince us that this dog of a market deserves our hard-earned cash. When the market shows some signs of rewarding us for risking our capital then we can allocate some cash. But it is just downright foolish to keep fighting the trend -- especially when we get closes like we have seen lately.
There isn't much to do right now other than hold high levels of cash and stay patient. If you've been doing that, it will pay off very nicely down the road.
Have a good evening. I'll see you tomorrow.