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The Market Needs Broader Selling in Order to Return to Health

The Market Needs Broader Selling in Order to Return to Health The DJIA is hovering at all-time highs while much of the rest of the market is wallowing in misery. May 05, 2021 | 06:42 AM EDT The definition of a bear market is broad selloff in many stocks and the indices of 20% or more. There have been two good recent examples in February-March 2020 when the COVID crisis hit and in the last couple of months of 2018 when the short volatility trade blew up. While these sorts of bear markets are uncomfortable to deal with, there is no great mystery about how to deal with them. The best move is to stay out of the way, protect capital, and wait for some indication that a bottom is forming.

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