But even though the market has moved higher following that amazing record-breaking day, the bear market is still alive and well in my book. Still, the desire to participate in a rebound rally is strong -- especially for those looking for bargains.
But let's be honest here: In a bear market, anything that looks cheap can get even cheaper. Just look at how the market destroyed Apple (AAPL) last week on massive volume. Remember, even before last week's earnings warning sent the stock tumbling, AAPL had already lost more than $250 billion in value, dropping some 33% from its all-time highs.
So, things can always go from bad to worse. That's why FOMO is such a problem for many investors and traders who can't demonstrate sufficient discipline.
But don't feel bad if that describes you. After all, we humans are herd animals by nature.
When there's some pleasure to be had by being associated with the herd, we want to be at the party. It's human nature -- and certainly if we get paid for herding by enjoying a rally, all the better.
But we have to consider the timing of our trades rather than the desire to be in common company. That's because bear markets will often present us with some of a market cycle's biggest and most spectacular rallies, since volatility is often elevated and comes down very hard.
Remember, the VIX was above 36 on Christmas Eve -- a time when the markets were more oversold than they had been since the 2008 financial crisis some 10 years ago. The sellers were exhausted and done -- nothing left but dip buyers, algos and high-frequency traders.
Many tagged along and went for a ride up in record style, but some of that move has already reversed itself this past week. Some who didn't sell were left holding the bag ... like the Apple buyers. (Apple went up sharply on Dec. 26, too).
Perhaps it was a false start -- a one-off trading day. Maybe it will be the start of a new bull run. But it's not easy being patient and waiting. However, this is one of those fears that you need to control, as the timing of entering a stock or the market in general is so critical.