The Dow Jones Industrial Average still needs to drop more than 1,500 points to meet the definition of a bear market, which is a drop of 20% from the highs. That is why we don't see the words "bear market"' too often in popular business media despite the horrible market action.
Make no mistake about it. This is a snarling, smelly bear market. About 30% of the stocks in the market are down 50% or more from their highs, and 80% of all stocks are below their 200-day simple moving averages.
The first step in effectively navigating a bear market is to accept and embrace the fact that there is one. The easiest way to get in trouble is to deny the fact and fight the trend. Many market players simply conclude that it is too late to do anything and they just sit and hope that the selling pressure is going to relent.
Rather than simply accept the fact of a bear market, many market players are constantly trying to guess when it will end. They spend all their time and energy trying to figure out when the bottom might occur. There is no way to know how deep this bear market will go, but the process of predicting its demise gives folks hope, so they keep on trying.
The way you feel about the bear market will depend to a great degree on the level of cash you are holding. If you are holding very high levels of cash, then you can focus on the opportunities that eventually will develop. There is no question that many good stocks are being unfairly sold, and they will bounce back when market conditions improve. Don't rush to buy them now, but track them and wait for market conditions to shift.
The market currently is oversold and has been for a while. There have been several bounce attempts that fizzled out very fast, but the problem now is that there are more trapped longs that will use strength to escape the misery of this market. That is what overhead resistance is all about.
We have a slight bounce in the early going, but other than being oversold there aren't any catalysts on the agenda. Embrace the bear by staying patient and protecting capital.