Interesting web and interesting behaviors during bear markets…

One web that I read one time a week is http://www.tischendorf.com/

The author is an active and independent investor and I've known it throw Althucher. They have worked together and I think he discloses good opinions although he is not focus on the day-day trading and he not talk about levels on index or equities.

The last week he did a post where he explained what characterizes bear markets:

-         Sellers are in control

-         Oversold condition can stays a lot of time

-         Markets drop a lot faster than they go up.

-         Volume and liquidity can dry up but price can still drop significantly

-         Cheap can get a lot 'cheaper'

-         Hope is slowly destroyed.

-         Bear market rallies try to suck in traders to trap them.

-         There are a lots of gaps to the downside (and to the upside too)

-         It takes a long time until market participants throw in the towel.

He recommended that appropriate trading behavior during bear markets:

-         Stay in cash or short

-         Sell the rallies mentality

-         Do not buy the dips unless you are an active and experienced trader (or make it with tight stop loss)

And finally two sentences that sum up all that he had learned:

-         Winning traders are not the ones who make the most during bull markets. Are the ones who give back the least during bear markets.

-         Capital preservation is the key for long-term survival in the markets.