Bull or Bear

The current stock market trend matters tremendously when you are trying to decide what stocks are worth owning and what stocks should be sold. Long term bull markets will have plenty of bear rallies with the reverse being true in bear markets where short-term bull rallies will occur. Since the middle of December, we have seen primarily a bull market trend. Bears have been gored. One recent example of this has been TVIX, the double volatility ETF. This stock never dropped below $16 per share in all of 2011 and was higher than $100 per share in the first part of October 2011. This all changed starting in December to the present. TVIX was in a free fall during the past three months. If you were expecting the former $16 bottom low to hold, you would have lost money for a while when TVIX dropped below $14.

As of the week ending February 24, TVIX was hanging around the $16 to $17 range with increasing volatility. The volume has been rising since TVIX formed a bowl bottom in the $14 range. The stock has also crossed the $20 mark two times recently. This is a case where you can probably make a small amount of money on TVIX during a bear rally within the greater bull market trend.

How do I know we are are in a bull market primary trend? The best place to look for support on this idea is the St. Louis Federal Reserve website where you will see charts of improving employment statistics along with low inflation and other good economic news. Two good stocks to own in the 2012 bull run are Clean Energy (CLNE) and Westport (WPRT). They are both involved in using plentiful natural gas for transportation purposes. Clean Energy is building natural gas fueling stations coast to coast and north to south. Westport is building natural gas engines for large 18-wheeler trucks, fleet trucks, and passenger trucks. After the nation-wide infrastructure is built, manufacturers will also be building natural gas cars. This revolution could possibly become as powerful as the computer and internet explosion of the 1990s!