At some point in the past 50 years, folks in the business media decided that a bear market occurred when the indices were down 20% or more from their highs. It is an artificial determination but the reason for this convention is that it made it much easier to write headlines. A drop of 20% from the highs is very easy to calculate and makes it very simple to write a declarative sentence about the state of the market.
The problem with this "rule" is that it can be extremely misleading. The indices don't always do a very good job of what is really going on in the market. We have a good example of that currently. Right now much of the market is down more than 20% and what is even more telling is that roughly 66% of stocks in the market are already below their 200-day simple moving average.
The indices do not reflect the same level of weakness as most individual stocks. The DJIA and the S&P 500 are still above their 200-day simple moving average and aren't even close to a 20% pullback at this time.
The indices say this is still a bull market but most stocks are saying it is already a bear market. That is important because it means the likelihood that a bottom will occur soon is better. Many individual stocks are washed out and are becoming good values but it is going to be very hard for them to bounce while the indices are under pressure.
What is most notable under the surface now is the disparities that are developing. There is still broad selling but some signs that value buyers are lurking. Many of the small cap names are no longer in freefall but they are not yet bouncing because of the pressure caused by the major indices.
The most important thing you can do at this stage is develop a list of stocks that you may want to buy when the market action improves. You can amend that list as things develop but it is helpful to track the names you like and watch how they act as the broad selling pressure continues. The better names should so signs of support even when the action is as dismal as it is today. Good relative strength will be an early indication that a stock may outperform in a better market.
I continue to do very little in this market. There is no rush to put capital at risk until there is some positive action.