Bad news!

Actually, what we saw on the news was not bad at all.

On Jul 19 afternoon, Barron's published an article titled, "Why There's a Chance the Stock Market Has Hit Bottom."

And this one as well. 

With a rather strong positive reaction to the Fed latest rate hike today (a 2.6% jump for S&P 500), one might think the worst has really been over for this bear market. Unfortunately, here comes the bad news. Headline news is generally a contrary indicator. When they report good news, bad outcomes usually follow.

Here is one example with "good news" reported late last year: 

Last December, investment bank JPMorgan Chase (JPM) said a sell-off was nowhere in sight. And then, one week later, the S&P 500 peaked. It's down about 18% since then.

So one thing we need to learn:  The stock market will not bottom when it is all over the mainstream news.

It won't. It can't. The bottom only arrives long after that... when the stock market falls out of the news completely... when most people have forgotten about Wall Street. Until that happens, stocks can continue to fall.

Of course it does not mean we cannot see rallies during a bear market. Quite opposite, we may see rather strong rallies during a prolonged bear market. Some stats about the bear market rallies: 

On the back end of the dot-com bubble, the S&P 500 rallied six times... by 8% and 9% at the start and then 21% twice closer to the bottom. In the financial crisis, U.S. stocks had five rallies, the last of which led to a 24% gain.

Even for this year's bear market, we have already seen 3 good rallies, including the one still ongoing now with today's strong bounce. The current one, we have probably seen the peak of this rally, maybe just a few points away from the ultimate top of this short-lived uptrend. S&P 4050ish is probably the apex. 

I'm gearing up for shorting the market soon!