Bear markets sure are exhausting. Just ask anyone who has been waiting patiently for this one to be over. Of course, nobody rings a bell to tell us when the bear market is completed. But we all know what lies on the other side of 'bear mountain' - a new bull market! And those are much more fun to be in, more people celebrating higher stock prices as we build our wealth.
But we need to wait for conditions to change, and this bear market so far is not showing signs as of yet. The weariness sets in when each day we are faced with the prospect of losing money, even though we are bullish and long companies and our country. It seems counter intuitive that businesses would be struggling here, but for some it is true.
Last week's job report was very strong, with an enormous amount of jobs created, more than double the estimate. That would be a positive for economic growth, if it were not for the Fed trying to drive down growth so as to cool off inflation. So there is a headwind for Fed policy that they truly do not want to change.
We have seen the markets roar back from deep lows in June, up 14% or more in just seven weeks. That is quite the move, dragged out with dripping volatility. That condition has fueled speculative juices and for the 'risk on, dip buying' crowd to pick up the pieces. With higher lows in the chart that is exactly what we see. Sentiment is starting to turn bullish as well, painted with a skeptical eye however as the wall of worry is up high.
All in all, many investors are eager to get back in the game with less worry about market downside. Of course, the painful lessons we learn in a bear market tend to carry over to the next bull market, and we often wait for an 'all clear' signal before getting involved again. That's okay too, there is no problem waiting for the right pitch to come across the plate before taking a swing.