The stock market will usually have a bear market every four to eight years, and 2015 is probably close to the doorstep of the next one. A lot of money can be made on the downside through selected short ETFs, though. I have a table below that lists some of my favorite short stocks. Certain sectors can also be in their own bear markets or sharp declines while the rest of the market is doing okay. I have listed DGAZ below for shorting natural gas because this is a situation that can happen every year. Beware, however, that you must take your profits when you have them because the bulls can regain control eventually.
In addition to outright bear markets, we often have corrections of single and sometimes double-digit percent amounts without actually going over the -20% that defines a bear market. Money can also be made in these pullbacks. If the economy is doing okay according to Federal Reserve statistics, the decline will not be sustainable, and you can buy certain stocks at the bottom to make a profit. These stocks are listed in the Pullback Recovery Table below. When do you know the correction is over, though? You can look at a chart of $NYMO
, the NYSE McClellan Oscillator. If the chart is -60 or lower, there is a 99% chance the market will rebound shortly, and you will have anywhere from days to weeks when you can profit from bullish stocks like those in the table.
Thirdly, I have listed an article table below with links to my BooksAndStocks
blog where I have talked about great articles by authors who have good plans for handling bear markets and corrections. My blog will also give a link to the full articles where you can read more about different scenarios.Market Shorts