Many investors have had a tough year. The year 2022 was marked by turbulence on the financial markets.
The Nasdaq, S&P 500 and Russell 2000 are all in bear market territory, while the Dow Jones is the only US index to fall less than 10% year-to-date.
The performance of US indices year to date paints a bleak picture: Nasdaq (QQQ) -33%, IWM (-23%), SPY (-20%) and DIA (-9%).
The returns for investors range from small gains to significant losses, depending on whether passive or active strategies are employed and whether funds are allocated to alternative investments – such as commodities.
Rigorous analysis and a trading plan are critical to successful trading in bear markets. Commodities are volatile and it is important to have stops and profit targets when trading commodities.
The chart below shows the performance of Silver (SLV) 26%, Sugar (CANE) 12%, Vanguard Value ETF (VTV) 11%, Gold (GLD) 9% and Vanguard Growth ETF (-3%). the last 90 days.
The S&P 500 started falling in early January and officially entered a bear market on June 13, 2022.
Inflation, higher interest rates and rising geopolitical tensions are all contributing to lingering concerns in the current bear market and will continue into 2023.
At a glance
- The dot-com bubble of the early 2000s resulted in the second-longest bear market in history, lasting 929 days and posting a 49.1% decline.
- The March 2020 COVID bear market was the shortest in history, lasting 33 days and declining by 33%.
- Excluding the longest and shortest bear markets, the average duration of a bear market is about 330 days — or just under a year, and more extended bear markets are closer to two years.
- The average bear market drawdown is about 33%.
If today’s stock market follows a similar time and price trajectory, the current bear market will last much longer than many people expect.
- Market conditions and price action will ultimately determine whether the S&P 500 sees lows of 3300, 3250, 3000, 2900 or even lower lows.
- The S&P 500 faces overhead resistance at 4,000, 4,100, 4,150 and with overhead resistance, 5,000 will be a number that will be difficult to break for a long time.
At MarketGauge, we take advantage of downtrends and bear market rallies when we can profitably participate in them.
Despite volatile financial markets this year, we are proud that many of our investments have held up and even grown. This inspires confidence in our proprietary investment strategies and execution to manage strategies for maximum returns while limiting drawdowns.
Fortunately, despite these difficult times, we have seen success with several strategies that have produced positive returns. The chart below shows a recent selection of some profitable trades.
- Smart investors know the importance of protecting against inflation.
- Is Silver About to Outshine Gold?, on September 20, 2022.
- Highlights of the column in mid-September.
- This commodity will sweeten your returns in early December.
Rigorous analysis and a well-crafted trading plan are critical to trading success in bear markets. It also helps to have several decades of trading experience on hand and have proven trading indicators to guide you.
As 2023 approaches, it’s helpful to keep the lessons of the past in mind while also focusing on executing risk-managed trades that are profitable today, like silver, as shown in an example highlighted below.
Stock Market ETFs Trading Analysis and Summary:
S&P 500 (SPY) 380 support and 390 resistance
Russell 2000 (IWM) 170 central support and 180 resistance
dow (diameter) 330 support and 337 resistance.
Nasdaq (QQQ) 269 support and 278 resistance
Regional Banks (KRE) 53 Support and Resistance 61.
Semiconductor (SMH) Support is 205 and 217 resistance.
Transportation (IYT) 211 is central support and 222 is now resistance.
Biotechnology (IBB) 130 is the central support and 139 is the overhead resistance.
Retail (XRT) 57 central support and 63 is now resistance. 60 recovered.
Twitter: @marketminute
The author may have a position in the securities mentioned at the time of publication. All opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.
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