29Dec11:27 amEST

There's Always Hope

As we wind down the final two sessions of 2022, bulls are finding some reason for hope in what has otherwise been a dreadful December. Stocks are squeezing on typical low volume for this holiday week, with the lowly oversold Nasdaq up about 2.4% as I write this. 

The rally may have some legs into the long New Year's weekend, especially considering most years it takes a week or two after the break for everyone to get back to their desks.

However, I am not too keen on trying to time this bounce--Instead, my focus remains squarely on playing the dominant trend lower.  

As bear markets unfold and mature, it can become rather tempting to try to play each counter-trend rally aggressively since bear market rallies can often be fast and furious. If the precise bottom and top of said bear market rally are timed perfectly it can be enormously profitable. 

But that can often be a trap, since maturing bear markets become increasingly vulnerable to washout moves lower. I think you will thus find that most rallies from here on out will be relatively short-lived until we get that crash. 


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