Yesterday the DOW went up over 300 points and the S&P 500 closed above 1975.
The stock market has been going straight up since it fell to its January and August lows last month and bounced off of them.
I have gotten a lot of emails about the market, because I have been very vocal about the risks in the market for more losses in a bear market and have been betting against junk stocks that are troubled.
Here is one email I received:
"So I'm just wondering with this market move. All the news from china, today's manufacturing hasn't been the best yet markets are moving higher. Are you still bearish long term or do you think the tides have changed and central banks wont let markets drop and markets will test new highs?? - Confused investor"
I do not think the news of yesterday has anything to do with the market move.
It is simply a bear market rally or bounce and the news doesn't have much to do with things at all.
Nothing has changed in regards to news.
And nothing has changed in regards to the big trend of the market.
The market is still below it's 200-day moving averages and those moving averages are sloping down.
Weak stocks are still dumping and bubble bulls are still chasing rallies.
The market is confusing when you focus on news that is just noise and daily market moves no matter what direction they are in.
Back in January when the DOW was down 500 points in one day and making a bottom I got calls on the phone from a few people who have retirement accounts scared and thinking of selling forever.
I actually thought it might be a temporary low and told them to wait.
Now they have no worries in the world.
In the end they will probably have been better off to sell out on that low, because now they won't sell.
This rally is going to be the worst thing that ever happened to them financially because of that.
The big trend is down, but rallies like this make most people just fall asleep when it comes to the stock market.
They tend to only take action after they suffer losses for weeks and then see a big down day.
The opposite happens to manic stock market bulls.
They'll see the market go up for a few weeks and then get excited near the top and buy in.
They chase stocks and have no idea what they are even buying.
So in December one of the top stocks bought was FIT in Ameritrade accounts and it crashed as it was junk.
Look at how many people got fooled into Valeant!
But can you feel sorry for people that hold a stock that people are warning all over the place is committing some sort of financial fraud?
People been warning for weeks and so the SEC is stepping in with a full investigation.
Who in the world was holding and trading that stock?
People who do not know what they are doing.
You gotta focus on the big trends of the market and as long as the market remains below the 200-day moving average it's a bear market.
Even if bulls are right and market bottomed it will have to go sideways for months to launch a rally back above those moving averages that will be real.
Look at gold and mining stocks.
They fell endless for years below the moving averages and had to spend almost an entire year building a base to finally break through them to begin a real bull market.
You gotta keep your eye on the big picture and that means focusing on the big trends.
If you try to figure use news stories to figure out the market moves you will end up endlessly lost in this market.
But that's what almost everyone does and now the news is saying everything is great and buy and believe again.
The masses are asleep.
That's what bear market rallies do to people, but they make opportunities to bet against the market and to bet against junk stocks.
Most people need to use this rally to get out of stocks they do not want to own anymore and raise cash to buy dips in new bull markets in gold and commodities.
Stock market bulls are not really in control of anything, because this is a bear market
rally.
In fact they are not in control of their own emotions and decisions and that is why they have been losing money since July and some buy into tops and even double down.
If they were in control they would be making consistent gains instead of making a mess
of themselves.
So to make money you need to do the opposite and use rallies to short sell or bet against stocks when they are buying and take profits when they end up selling themselves in panic.
Now gold bulls are in control of the gold market, but that's a different topic for a different time and I receive zero emails on gold, because in new bull markets everyone is asleep too.
I cannot really put charts in an email, but I will do a detailed chart analysis in this
weekend's Power Investor report about these markets and short-term trends.
The most recent issue also is about my five top POS stocks to bet against in March on this bounce, because when it is over I expect them to crash.
You can get both of these reports by simply joining my POS Stock Program so if you want
all my stuff go here: