TRADING JOHN MURPHY

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12/21 U.S STOCKS ARE NOW IN A BEAR MARKET ... This week's drop by all major stock indexes below their early 2018 lows confirms that U.S. stocks have entered a bear market. Some parts of the market have already crossed the -20% threshold which also defines a bear market. They include small caps stocks and the transports, while the Nasdaq may be there by the end of the day. The energy sector has already lost dropped more than -20%, while several other sector SPDRs are dangerously closer to that bear market threshold which include consumer cyclicals, financials, industrials, materials, technology, and communications. Cash is usually the best place to hide in that weaker environment. What's especially unsettling is that the Fed (and most economists) don't seemed that concerned. They keep assuring us that the U.S. economy remains strong. But what about weaker foreign economies? If your best customers are losing their jobs, your company is in trouble. The same is true of weaker countries who buy your products.

BY JOHN MURPHY

PS: I agree.