Here's where I feel let down right now. I watch CNBC and I am a free market capitalist like they are. So I have to ask you WHY you are letting the market fall like this? I know you have the power to print more money and provide the fuel necessary for this stock market to reach even higher highs than before. There is no reason for you to raise interest rates and not print more dollars. I was at my Starbucks job yesterday and overheard a rich guy that comes in there tell his table there is no reason to have a correction. My generation and for that matter all generations need your help. Please consider this request.
Yours truly Andy Rand
Read this please, your pal Janet.
Primary Downward Trend (Bear Market)
The Distribution PhaseThe first phase in a bear market is known as the distribution phase, the period in which informed buyers sell (distribute) their positions. This is the opposite of the accumulation phase during a bull market in that the informed buyers are now selling into an overbought market instead of buying in an oversold market.
In this phase, overall sentiment continues to be optimistic, with expectations of higher market levels. It is also the phase in which there is continued buying by the last of the investors in the market, especially those who missed the big move but are hoping for a similar one in the near future.
As was the case in the accumulation phase, the distribution phase can be difficult to spot in its early stages. The reason for this is that it may be disguised as a secondary downward trend within the primary upward trend.
From a technical standpoint, the distribution phase is represented by a topping of the market where the price movement starts to flatten as selling pressure increases . The mid to latter stages of the distribution phase will see prices start to fall as more and more investors, anticipating weakness, exit their positions.
A new downward trend will be confirmed when the previous trend fails to make another consecutive higher high and low.
Public Participation Phase
This phase is similar to the public participation phase found in a primary upward trend in that it lasts the longest and will represent the largest part of the move - in this case downward.
During this phase it is clear that the business conditions in the market are getting worse and the sentiment is becoming more negative as time goes on. The market continues to discount the worsening conditions as selling increases and buying dries up.
This is also the point at which most trend followers and technical traders start to dump their positions and take short positions as the new downward trend has confirmed itself.
The Panic PhaseThe last phase of the primary downward market tends to be filled with market panic and can lead to very large sell-offs in a very short period of time. In the panic phase, the market is wrought up with negative sentiment, including weak outlooks on companies, the economy and the overall market.
During this phase you will see many investors selling off their stakes in panic. Usually these participants are the ones that just entered the market during the excess phase of the previous run-up in share price.
But just when things start to look their worst is when the accumulation phase of a primary upward trend will begin and the cycle repeats itself.
Read more: Dow Theory: The Three Phases Of Primary Trends | Investopedia http://www.investopedia.com/university/dowtheory/dowtheory3.asp#ixzz3jrY1DbrH
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