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Wednesday, February 8, 2023

When will the bear market roar again?

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Many signs point to the recent bear market rally coming to an end. So investors are watching closely for signs of the next catalyst to drive stocks lower again. 40-year investment veteran Steve Reitmeister lists events in the coming economic calendar that could indeed lead to the next big sell-off. This goes hand in hand with a “Bear Market Game Plan” with 9 trades to make a profit while the stock market (SPY) goes down.


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You could tell the market was oversold again as we hit new lows in mid-October. So it was no surprise that a bounce would soon follow.

That rally has been biased and overextended by investors who don’t understand basic economics. Inflation falling from 8% to 7.7% is nowhere near the Fed’s target of 2%. So their work to curb inflation, and I probably damage the economy, is far from over.

Now stocks are consolidating under resistance at 4,000 for the S&P 500 (SPY) while waiting for the next catalyst. What will it be and what will happen next?

That will be the focus of this week’s Reitmeister Total Return commentary.

Market Commentary

Last week I noticed that the bullish bias of holiday weeks was an optical illusion. So don’t fall for the seemingly bullish signal to move above 4,000.

Indeed, it didn’t take long for the turkey hangover to set in, as shares tumbled Monday with a session of -1.54% closing at 3,963.94. And went a few ticks lower on Tuesday.

The long-term outlook is decidedly bearish for several reasons mentioned in my recent comments. In fact, the vast majority of investors now see the formation of a recession coming in the first half of 2023, which should lead to a further price decline.

The interesting question is what does it take to get that next downward leg moving?

Since it’s a misunderstanding of the October inflation reports that led to the recent rally…then it’s likely the removal of that catalyst to allow the stock to retest the October low of 3,491.

That catalyst could occur as early as Wednesday or Thursday of this week with the release of PCE Core Prices and PCE Core Index respectively. These are considered the Fed’s preferred measures of inflation and can have a marketing impact.

Or perhaps it could be further evidence of economic decline shown in the following roll call of economic reports:

12/1 ISM production

12/2 Government employment situation

12/5 ISM services

After that there will be a short break until we take a look at this next news item:

12/9 Producer Price Index (PPI)

12/12 Consumer Price Index (CPI)

12/13 Fed rate decision

Because as much as I believe in the extension of the bear market into 2023, I have to admit that anything is possible. Especially now that energy prices have fallen recently. That can often have far-reaching disinflationary benefits that increase the likelihood of a soft landing.

Don’t get me wrong…most signs point to bearish. And nothing about the recent rally is unusual for prolonged bear market cycles. However, when most investors unite on one side of the market swing, it can often lead to surprising moves in the other direction.

It is from that counter-intuitive notion that one of the most commonly used investment sayings stems:

“The market climbs a wall of worry and slides down the slope of hope.”

This means that the stock market often does the opposite of what you expect. So it’s a call to keep looking at each new clue as it comes out and to stay nimble in your trading plan to account for this new input.

Long story short, the smart money is still riding a recession and a deeper bear market in early 2023. The 8 major economic events to take place between now and mid-December, as mentioned above, will likely hold the clues to what happens next.

As always, I will remain vigilant for these events and make necessary changes to our portfolio. Until then, most of the evidence currently in hand still points to a 2023 recession with a bear market bottom closer to 3,000.

What to do now?

Discover my special portfolio of 9 easy trades to help you generate profits as the market continues to slide into bear market territory.

This plan has worked wonders since it went into effect in mid-August, generating hefty gains for investors as the market crashed.

And now is a good time to reload as we face another bear market rally before stocks hit even lower lows in the weeks and months to come.

If you successfully sailed through the investment waters in 2022, you can ignore it.

However, if the bearish argument shared above has you curious about what happens next…consider getting my update”Bear Market Game Planwhich details the 9 unique positions in my timely and profitable portfolio.

Click here for more information >

Wishing you a world of investment success!


Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
CEO, Stock News Network and Editor, Reitmeister Total Return


SPY Stocks. Year-to-date, SPY is down -15.82% versus a percentage increase in the benchmark S&P 500 index over the same period.


About the author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the company, but he also shares his 40 years of investing experience in the Reitmeister Total Return Portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.

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