Are we in a bear market already?

 While surfing on youtube.com recently ( Yes, I still use surfing, I am THAT OLD ), I have come across a few advertisements about training programs on trading. 

The spoke persons are normally young with attempts to demonstrate how successful they are in trading. 

I have seen the guy's advertisement before, he sat on a beach bench next to a swimming pool and the first thing came from his mouth was" stop buying stock!" I clicked "skip" straight away.

The woman on the other hand talked about the seminars she conducted and tried featuring some successful students of hers. She even featured a trip she made oversea while still making money. 

Both promoting trading using options, claiming that this is also the same strategy used by Warren Buffet.

What they are reluctant to show is that to be successful in trading, you have to first experience failure to prepare those people thinking of entering the market. 

They all come with a single message this time, " we are in a bear market..".

The message puzzles me, are we seriously in the bear market?

Let's bring in a reversal scenario from the past, the one I get to know when I first met technical analysis, the Strait Times Index.

Fig 1. STI Weekly Chart from 1992 to 2003

I have purposely pulled out the period between 1992 till 2003. That is the period when we encountered the Asean market euphoria, the Asia financial crisis, US Enron and Worldcom scandal between 2001 and 2002.

This is where we see signs of reversal starting with steep climb of above 60o angle, top formations that last 2 to 3 years before breaking the neckline before we can claim that it is a bear market, as can be seen from the chart in Fig 1. You will also notice a larger fluctuation of individual bars, overlapping each other.

I believe the speakers in the advertisements are referring to US market. So let's take a look at Dow Jones Industrial Index ( DJIA) to see if all these signs are present?

Fig 2. DJIA Weekly Chart

In DJIA, I see a steep climb and patterns of erratic movements with bars overlapping each other. However, I have not yet seen the completion of top formation, neither am I seeing signals indicating a reversal behavior such as a failure or non-failure swing.

Further more, after the recent reversal from the 89-week moving average, DJIA is seen creeping upward with momentum. In my earlier article Dow Jones, Hang Seng & Nikkei Up-dates - 13/8/2022, I am still bullish on this index ( with some reservation ). 

I can't use the formation in 2021 to determine a reversal and confirmation of a bear market, the double top in 2002 have already met its minimum objective.

There is still some way to go for top formation, DJIA might still go higher or congest to complete the pattern. 

Having said that, when was the most recent bear for Singapore STI?

Fig 3. STI weekly Chart

I have not been on STI for a while as I am not trading this index, and I have to admit that I am a little surprised to see this on STI. 

A top formation completed between  2017 to 2020 and it was on a free fall after that. If not for the lock down in March 2020, I can't imagine how low it would have gone. If lock down have not happened, the government would not know what to say about how the market could become so bad. No wonder they were so desperate to conduct the election in the midst of a pandemic lock down. 

The problem that I see with STI now is the similarity it has with the period of 1998 to 2002 ( refer to Fig 1.), a sharp plunge, recovered but failed to hit previous high. What followed  was a second recession until 2002, 911 and invasion of Iraq led to a slow market recovery till 2008 ending with the Lehman Brothers bankruptcy.

Will the same happen this round with a top formation till end 2022 or 2023, then another recession takes place?