[Tryst]

Are we on the cusp of a continuation versus start of a bear? I really am wondering what is going on. I note that a 50/50 world/uk fund that I have part of a pension in has just made a new high.

Stage 4 doesn't necessarily mean that there will be a bear market as during major bull markets the Stage 4 breakdowns tend to be short, sharp, flushes which die out very quickly as bargain hunters come in. But you never know whether a breakdown into Stage 4 is just a correction or the start of a bear market and hence when it does happen Weinstein's method recommends being predominately in cash or short the market.

Great post isatrader, and something that goes through my mind whilst i'm still learning the workings and functioning of Stage Analysis. That stages are not symmetrical. I.e. a stock can rise 100% in a bull market, kissing its 50/150 day MA on the way up, and then retrace 50% as the MAs flat line and then head lower, before flat lining and turning higher to make another 100%. I'm trying to hone my judgement on this aspect to sharpen up on trading in and out of stocks, though some stocks can remain in a bull market for years, whilst some are more volatile (junior oilers) which means you have to be a lot sharper.

Currently, the UK market is in varying phases of Stage 3, as can be seen from the FTSE100, FTSE 250 and AIM All Share Indexes below:

As with the US, the UK market is seeing a rotation to the larger cap value stocks at the moment, with small and micro cap stocks getting hit hard as you'll have seen from the large number of Stage 3 and 4 stocks appearing in the daily watchlists. But the quality of any new breakouts has continued to be quite poor, and so that makes me cautious still on whether the breakouts in the larger caps is to be trusted or whether it's just the last part of this phase of the bull run that began in 2011, as the large cap defensive stocks are always the last to breakdown I believe.

So I'm continuing to sit on sidelines, as I have since late March, as the quality and quantity of Stage 4A breakdowns continues to outnumber the quality and quantity of Stage 2A breakouts by a long way. Although last week was the first week in a while, that the Stage 2 breakouts and continuations where showing better quality imo. So a short term improvement, which can be seen in the bounces in the small and micro cap charts above.

I agree with you on this and here is a quote taken from Mark Minervini book, Trade Like a Stock Market Wizard, which I just read only a few days ago. Its from Chapter 9, Follow The Leaders.

"Market leaders tend to foretell turns to the downside as well. As a bull market enters its later stages (generally after one or two years), many of the leadership stocks that lead market advance will start to buckle while the broad market averages march on towards their tops. Typically, a second wave of postleadership stocks start to perform relatively well as money rotates out of the true leaders and into some of the groups constituents, laggard followup stocks, or defensive groups such as drugs, tobacco, utilities, and food stocks that are thought to be less sensitive to an economic downturn. Follow-on stocks and laggards, however, rarely experience the length or, more important, the magnitude of the price move that true market leaders accomplish. When you see this rotation occurring, its a warning that the market rally may be entering its later stage. The ultimate market top may still be weeks or even months away, but this internal market action is a proverbial shot across the bow that get your attention."

I think that paragraph sums up what isatrader stated and also what the market (FTSE at least) is currently experiencing.

My only doubt is the US markets, and how rigged these are, but also, they are still showing good breadth, and this could pull the FTSE up with it.