Several Stocks Have Already Entered Their Own Bear Market

I’ve talked myself blue in the face about how we’ve been in the riskiest end of the spectrum when it comes to investing new capital into equities.

Now, more and more evidence is building to show that many stocks have already started their own bear market.

A couple weeks ago I talked about how the NASDAQ making new highs while more of its stocks actually went down than up was a sure sign of trouble for the markets. In the past 30 years, that’s happened a grand total of 10 times. And it’s always been met with a good thumbing in equities.

That means the market is much weaker than it appears on the surface. The Wall Street Journal even ran a recent graphic showing that just six stocks accounted for all the gains in the S&P 500 this year through late July.

Just six stocks out of 500 accounting for all the gains. How could that possibly be a good thing?

More interesting to me is an analysis coming out of Ned Davis Research showing that at the end of July, more than 20% of S&P 500 stocks were down 20% or more. So, right under our noses, the market is starting to fall apart!

Now is the time to be vigilant. With hundreds of leading stocks already in their own downturn, my level of concern is even higher. The bear market has begun. We just don’t realize it yet.

If you wait until leading stocks like Apple, Google, and Facebook selloff, it will be too late. The rest of your portfolio will already be in the dumps.

John Signature

John Del Vecchio
Contributing Editor, Dent Research

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Categories: Stocks

About Author

In 2007, John Del Vecchio managed a short only portfolio for Ranger Alternatives, L.P. which was later converted into the AdvisorShares Ranger Equity Bear ETF in 2011. Mr. Del Vecchio also launched an earnings quality index used for the Forensic Accounting ETF. He is the co-author of What's Behind the Numbers? A Guide to Exposing Financial Chicanery and Avoiding Huge Losses in Your Portfolio. Previously, he worked for renowned forensic accountant Dr. Howard Schilit, as well as short seller David Tice.