Impatiently Patient

I mentioned a few months ago that my goal in this Bear Market was to try and figure out how to play the inevitable counter-trend Bear Market Rallies. They were sharp and exciting and if you could time things perfectly, you could make a fortune. Volatility made this too difficult of a plan to execute. This sure looks like a lot of Bear Rallies past.

This is the 4th moon-shot rally (Green Lines) into the 30-week moving average (Orange Line) of the Bear Market. The last Bear Market also had 4 of these sharp rallies.

If we replay the 2002 – 2003 Bottom, then this rally will fail soon and a retest of the March 2009 low will occur. I think that scenario is the most likely, so I am waiting before I commit capital – besides, the volatility intra-day scares the heck out of me.

What amazes me is that even after this incredible rally, the S&P 500 is still DOWN -2.85% on the year. Can you image going through that incredible selloff and then that incredible rally and still being down on the year? Yikes…