Trading For Dummies, 4th Edition
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As you trade stock on the market, you need to know when the market is taking a downward turn — becoming a bear market. The signs in the following list indicate a bear market is approaching, so adjust your trading strategy accordingly:

  • Bear markets typically begin before the economy starts to decline.

  • Interest rates are rising.

  • Industrial production is starting to fall.

  • Basic material stocks, energy stocks, and consumer staples are performing well.

  • The weekly chart of the S&P 500 shows lower highs and lower lows; the MACD (moving average convergence divergence) line is below the trigger line and falling.

  • The bullish percent index indicator shows a bear alert or a bear confirmation pattern.

About This Article

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About the book authors:

Lita Epstein, MBA, is the author of more than 35 books, including Bookkeeping For Dummies and Reading Financial Reports For Dummies. Grayson D. Roze has worked in the financial services industry for StockCharts.com since 2012. He now serves as a business manager at the company. He is the author of Tensile Trading: The 10 Essential Stages of Stock Market Mastery.

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