How to Identify the Beginning of a Bear Market

As you trade stock on the market, you need to know when the market is taking a downward turn — becoming a bear market. The signs in the following list indicate a bear market is approaching, so adjust your trading strategy accordingly:

• Bear markets typically begin before the economy starts to decline.

  
  



• Interest rates are rising.

  
  



• Industrial production is starting to fall.

  
  



• Basic material stocks, energy stocks, and consumer staples are performing well.

  
  



• Weekly chart of S&P 500 shows lower highs and lower lows; the MACD (Moving Average Convergence / Divergence) line is below the trigger line and falling.

  
  



• Bullish percent index indicator shows bear alert or bear confirmation pattern.

  
  

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