Bear Market Confirmed

By Colin Twiggs
January 9, 2:00 a.m. ET (6:00 p.m. AET)

These extracts from my trading diary are for educational purposes and should not be interpreted as investment advice. Full terms and conditions can be found at Terms of Use.


A short note to wish you peace and prosperity in 2008 and to remind readers that our regular newsletter service resumes next week.

Bear Market Confirmation

Unfortunately the new year has not had a good start, with both the Dow and S&P 500 breaking through primary support after the recent market top. The two major indices, in conjunction with the Dow Transport index, now confirm the start of a bear market.

dow jones industrial average medium-term chart

S&P 500

The S&P 500 breakout below 1400 signals the start of a primary down-trend.

standard and poors 500

In speculation when the market goes against you, you hope that every day will be the last day — and you lose more than you should had you not listened to hope ........ And when the market goes your way you become fearful that the next day will take away your profit, and you get out — too soon ........ The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a far bigger loss, and hope that his profit may become a big profit.

~ Jesse Livermore in Edwin Lefevre's : Reminiscences of a Stock Operator.

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