Many investors have had a tough year.
The year 2022 was marked by turbulence on the financial markets. The Nasdaq, S&P 500 and Russell 2000 are all in bear market territory, while the Dow Jones is the only US index to fall less than 10% year-to-date. The performance of US indices year to date paints a bleak picture: Nasdaq (QQQ) -33%, IWM (-23%), SPY (-20%) and DIA (-9%).
The returns for investors range from small gains to significant losses, most likely depending on whether passive or active strategies are employed and whether funds are allocated to alternative investments – such as commodities. Rigorous analysis and a trading plan are critical to successful trading in bear markets. Commodities are volatile and it is important to have stops and profit targets when trading commodities.
The chart shows the performance of silver (SLV) at 26%, sugar (CANE) at 12%, the Vanguard Value ETF (VTV) at 11%, gold (GLD) at 9% and the Vanguard Growth ETF at -3%. in the last 90 days.
The S&P 500 started falling in early January and officially entered a bear market on June 13, 2022. Inflation, higher interest rates and rising geopolitical tensions are all contributing to ongoing concerns in the current bear market and will continue into 2023.
At a glance
- The dot-com bubble of the early 2000s resulted in the second-longest bear market in history, lasting 929 days and posting a 49.1% decline.
- The March 2020 COVID bear market was the shortest in history, lasting 33 days and declining by 33%.
- Excluding the longest and shortest bear markets, the average duration of a bear market is about 330 days — or just under a year — and more extended bear markets are closer to two years.
- The average bear market drawdown is about 33%.
If today’s stock market follows a similar time and price trajectory, the current bear market will last much longer than many people expect.
- Market conditions and price action will ultimately determine whether the S&P 500 sees bottoms of 3300, 3250, 3000, 2900 or even lower.
- The S&P 500 faces overhead resistance at 4,000, 4,100, 4,150 and 5,000 overhead resistance, which will be a number that will be difficult to break for a long time.
At MarketGauge, we take advantage of downtrends and bear market rallies when we can profitably participate in them. Despite volatile financial markets this year, we are proud that many of our investments have held up and even grown. This inspires confidence in our proprietary investment strategies and our ability to manage strategies for maximum returns while limiting drawdowns. And fortunately, despite these difficult times, we’ve seen success with several strategies that have produced positive returns. The chart below shows a recent selection of some profitable trades.
- On August 21, 2022, MarketGauge’s Big View members were informed that Value has outperformed Growth as an outperforming strategy and continues to lead Value’s price range (or ratio) versus Growth.
- On August 30, 2022, Mish released “Smart investors know the importance of protecting against inflation“.
- Misch wrote a previous column, “Is silver about to outshine gold?”on September 20, 2022.
- As 2022 draws to a close, it’s worth taking stock of some of their recent findings, Highlights of the column in mid-September.
- Mish has written extensively about sugar over the past few years. She recently wrote an additional article on sugar, “This commodity will sweeten your returns“, The beginning of December.
Rigorous analysis and a well-crafted trading plan are critical to trading success in bear markets. It also helps to have several decades of trading experience on hand and have proven trading indicators to guide you.
As 2023 approaches, it’s helpful to keep the lessons of the past in mind while also focusing on executing risk-managed trades that are profitable today, like silver, as shown in an example highlighted below.
If you would like to learn more about how MarketGauge can help you trade with an edge, contact Rob Quinn, our Chief Strategy Consultant who can provide more information Mish’s premium trading service and other trading strategies that we offer with a free one-on-one consultation.
“I grew my money tree and you can too!” – Misch Schneider
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In this appearance on Business First AMMish talks about why she chooses Nintendo (NTDOY).
Misch sits down Gav Blaxberg for a WOLF podcast what she learned as a trader and teacher.
https://www.youtube.com/watch?v=CAeGDCEU104
In this appearance on Business First AMMish explains that with the right risk management, even the worst trade shouldn’t be too bad.
In this appearance on Real Vision, Mish joins Maggie Lake to share her take on the key macro drivers in the new year, where she’s targeting tradable opportunities and why investors need to turn their heads. Recorded December 7, 2022.
Mish sits down with CNBC Asia to discuss why all Tesla (TSLA), sugar and gold are all on the radar.
Read Mish’s latest article for CMC Marketswith the title “Two closely watched ETFs could fall further“.
Misch addresses the current confusion in the market this appearance on Business First AM.
Mish discusses trading the Vaneck Vietname ETF ($VNM). this previous appearance on Business First AM.
- S&P 500 (SPY): 380 support, 390 resistance.
- Russell 2000 (IWM): 170 central support, 180 resistance
- Dow (DIA): 330 support, 337 resistance.
- Nasdaq (QQQ): 269 support, 278 resistance.
- Regional Banks (KRE): 53 support, 61 resistance.
- Semiconductor (SMH): Support is 205, resistance is 217.
- Transport (IYT): 211 central support, 222 now resistance.
- Biotechnology (IBB): 130 is central support, 139 is overhead resistance.
- Retail (XRT): 57 key support, 63 now resistance. 60 recovered.
Misch Schneider
MarketGauge.com
Director of Trade Research and Education
Wade Dawson
MarketGauge.com
portfolio manager
Misch Schneider serves as director of trading education at MarketGauge.com. For nearly 20 years, MarketGauge.com has provided financial information and training to thousands of individuals, major financial institutions and publications such as Barron’s, Fidelity, ILX Systems, Thomson Reuters and Bank of America. In 2017, MarketWatch, owned by Dow Jones, named Mish one of the top 50 financial professionals to follow on Twitter. In 2018, Mish was the winner of Top Stock Pick of the year for RealVision.
