2020 Recession - We Are Already in a BEAR Market 🐻

Описание: The BEAR Market is here! We are in a Bear Market (Stock Market Crash) and many investors don't even know it. What is a bear market? It is when the stock market is down 20% or more, and typically stays below this level for 2 months or more. Generally investors will use the S&P 500 as the benchmark for this, and when the S&P 500 is down 20% or more - they say we are in a bear market. Back in December 2018, we entered bear market territory very briefly but the bulls stepped back in and we made new ATH's in the market just a few months later.

But what If I told you that right now, we are ALREADY in a bear market and we just don't see it clearly yet? If we look at the SPX, you can see that right now, the S&P 500 is only down around 6% from it's ATH. I believe right now, the SPY is in a delusional state thanks to a few big stocks that are keeping us high. Although the index is made up of roughly 505 stocks, not all of them are weighted equally! The larger the market cap of the company - the more weight it has on the index. Some may argue and say this should be the case because they are the more relevant companies for our economy, and some may argue that everything should we weighted equally. Regardless - the bottom like is the higher the market cap, the higher weight the company holds.

So let's look at the actual breakdown of the SPX and look at the weightings. A little over 27% of the overall weight is determined by the top 15 stocks here - out of the 505 stocks. MSFT, AAPL, FB, AMZN, GOOGL make up 16% of the overall market - that is 5 out of the 505 stocks make up 16% of the SPX! In other words, 0.99% of the stocks in the SP500 determine 16% of it's value today. This is why I think that the SPX artificially up today - and we are really in a bear market already. Let's look at some other LARGE companies that are down significantly from their ATHs: NVDA - $100B company is down 50%, ABBV - $100B company is down 50%, MO - $90B company, down 41%, 3M - $100B company, down about 38% from its ATHs. Then you get into companies that are in the $50-$100B range - GS down 30%, CAT down 33%, BA - this ones close to $200B, down around 27% from ATHs. And then if you look at smaller companies, say under $50B, the list goes on and on of significant crashes in these stocks - IRBT down 52%, ALGN down 56%, SQ down 40%, FDX down around 45%, and the list goes on and on.

Many stocks if they aren't down this significantly, are still down 20% or more from their ATHs - like PFE for example which took a hit recently. Stock after stock, we're seeing double digit corrections or crashes, some even over 50%. Now looking at this Data, how can you tell me we are NOT in a bear market? Just because a few stocks are holding the market up, does not mean we ignore the other 450+ stocks that are down. There are some other stocks which I didn't mention which once again have a higher weight which is helping keep the market up like DIS, MCD, PEP, KO - a lot of these "safe" stocks that people flood to when there's a bear market or recession.

Another piece of data I like to look at is how many stocks are above or below their 200 MA. The 200MA is usually seen as a strong level of support, and when stocks drop below this, it's a bearish signal and typically they are off quite significantly from their ATH's for them to drop below the 200MA. About 42% of stocks are above their 200MA, and 58% of them are below right now and this means that the majority of stocks are showing us bearish signals here that their charts are looking weak. If you look at the 50MA, which is not as significant but still good to keep an eye on, this number gets even more staggering - only 28.5% are above and 71.5% are below. What this tells us is that out of the 42% of stocks above their 200MA, 71.5% of them are actually below their 50MA, and could be heading to the 200MA - another signal of bearish movement.


#BearMarket #MarketCrash #PositiveInvesting


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