In other words, it makes folks question if we\u2019re even in a bear market at all.<\/p>\n
Then, the bear takes another swipe.<\/p>\n
We don\u2019t have to go too far back in time to find evidence of this action. Think about the bear market that occurred in 2022. Here\u2019s the chart of the S&P 500 from back then\u2026<\/p>\n\n\n The S&P 500 peaked in early January 2022. It then suffered its first decline phase \u2013 falling 16% in two months.<\/p>\n We then got a stunning, \u201cV\u201d shaped rally. The S&P recovered most of its first phase decline.<\/p>\n V-shaped rallies are dangerous. Investors who sold at the bottom regret their decision. They buy back in at higher prices. And, this time, they vow not to get \u201cbluffed\u201d out of positions on the next decline because apparently, stocks only go up.<\/p>\n During the second decline phase, these investors hold onto their stocks and endure larger losses because they\u2019re convinced they made a mistake selling the first time around.<\/p>\n It takes a larger downside move to convince these investors otherwise. That\u2019s why the second stage of a bear market is often the largest decline phase.<\/p>\n It happened in 2022. And, for reasons we\u2019ve written about here in Market Minute<\/em> over the past two weeks, it\u2019s about to happen in 2025 as well.<\/p>\n Could I be wrong?<\/p>\n Absolutely. Maybe the stock market will keep pressing higher and the S&P will make a new all-time high in the days\/weeks ahead.<\/p>\n But, if I am wrong, since the market is already in an extended condition \u2013 with the various moving averages expanded far away from each other \u2013 we\u2019re not going to miss out on a huge move higher. There\u2019s not much fuel remaining for that sort of a move.<\/p>\n If I\u2019m right, though, then the next move lower could be significant.<\/p>\n This is not the sort of environment where it makes a lot of sense (at least to me) to pay 23 times earnings to buy the S&P 500.<\/p>\n Best regards and good trading,<\/p>\n Jeff Clark P.S.<\/strong> This market environment does have plenty of opportunities to make money \u2013 like with my Bill Payer Strategy.<\/a><\/p>\n I can show you how to use what I believe is the single best income-producing strategy to make upwards of $400\u2026 in just one week.<\/p>\n And this isn\u2019t a cherry-picked result.\u00a0I\u2019ll show you how to do it over and over again right here.<\/a><\/p>\n![\"\"](\"https:\/\/jeffclarktrader.com\/market-minute\/wp-content\/uploads\/2025\/05\/5.30.25-jmu.png\")
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Editor, Market Minute<\/em><\/p>\n