Has the Bear Market Arrived?

STI 12 Aug 2011

(Click on image for bigger view)

If you look at the STI chart above, you will realized that during the past 10 years, the 50-day EMA (exponential moving average) only cut the 200-day EMA twice. This is very significant to me. It’s a confirmation that the bull market has turned into a bear market.

During the past week, STI plunged more than 10%. The 5o-day EMA has cut the 200-day EMA already.

However, I am still holding my shares. Why?

The 50 EMA is still above 200EMA for Dow Jones.

The market seems to rebound for the past 2 days. It might of course be a dead cat bounce. Unless the market can convincingly drop further the next few trading days, only will I sell my shares and head for the exit.

I will let the market tells me what to do. Having an exit plan firmly in my head helps me to be more rational and prevent panic selling.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *