Let’s start with the basics. A bear market is generally defined as a 20% or greater drop in stock prices, and the S&P 500 is the benchmark most investors use to measure it. Since 2000, we’ve seen eight different bear markets. That includes well-known periods like the dot - com bust, the 2008 financial crisis, and the COVID crash in 2020. But not all bear markets are created equal.
Three of those eight - including the one we’re heading into right now - stand out for being more aggressive, more painful, and more damaging than the typical garden - variety downturn. These aren’t just corrections; they’re full - blown market resets. And if history is any guide, the investors who understand the difference between surviving and thriving in a bear market will be the ones who come out far ahead when the next bull market begins.
Each of those eight bear markets has followed a predictable pattern - one that helps us recognize the early warning signs, identify when the heaviest part of the selling is underway, and eventually spot the moments when it’s time to start looking for a long - term bottom.
These patterns don’t give you a perfect playbook, but they do offer signals. First come the breakdowns - usually in the most speculative corners of the market. Then the broader indexes roll over, and that’s when the selling picks up speed. After that comes the emotional washout—where fear takes over and most investors just want out at any price. But that’s also when you start seeing the signs of opportunity: oversold conditions, panic - level sentiment, and a handful of resilient stocks quietly starting to lead.
The key is to know where we are in that cycle—because timing matters. Jump in too early, and you risk more pain. Wait too long, and you miss the next bull run.
That’s what this report is all about.
In the pages ahead, I’m going to break down the three critical components of every bear market—technicals, fundamentals, and sentiment—so you can understand exactly what’s happening beneath the surface right now. We’ll look at what history tells us, what the charts are signaling, and most importantly, what you can do about it.
Because surviving a bear market isn’t just about riding it out. It’s about knowing when to protect your capital, when to get aggressive, and how to position yourself for the next wave of long - term gains.
Historically, the best way to survive—and even beat - a bear market is to understand how one works. That’s what we’re going to do here.
Over the past 20 years, we’ve lived through eight different bear market cycles. Among them, three clearly stand out: the dot - com collapse in the early 2000s, the 2008 financial crisis, and the COVID - 19 crash in 2020.
Each had its own unique set of circumstances, but all followed a remarkably familiar playbook.
Take COVID - 19 for example. It was the shortest bear market of them all, but also one of the clearest in terms of spotting a bottom. That’s because investor fear hit extreme levels almost instantly—panic selling, volatility spikes, and historic levels of bearish sentiment. (We’ll dive deeper into fear and sentiment in just a bit.)
What’s important to know is that every bear market, no matter the cause, eventually runs its course—and what comes after is just as critical to understand. All eight of those downturns were eventually followed by a recovery phase marked by rising earnings or rising valuations, or both.
Bear markets don’t just end because prices get low. They end because expectations get too low—and then start to rise again.
One of the earliest signs that a bear market is on the horizon shows up in the technicals - and more importantly, in investor sentiment.
At the top of the market, everything feels good. Earnings are strong, the headlines are bullish, and stocks are hitting new highs. But if you look closely, the cracks are already forming beneath the surface.
Technically, we start to see deterioration long before the major indexes break down. Breadth thins out—fewer and fewer stocks are making new highs even as the S&P 500 or Nasdaq continue to rise. You’ll often see momentum indicators like RSI or MACD diverge from price. That’s a warning shot.
Then come the moving average shifts. The 50-day moving average of the majors averages like the S&P 500 and Nasdaq 100 shift into declining patterns. This happened in February 2025 most recently. The shifts warns that the trend is no longer your friend. Combine that with lower highs and lower lows across the major indexes, and the technical picture turns from bullish to cautionary fast.
Meanwhile, sentiment tells another story. When everyone’s bullish and no one thinks stocks can go down, that’s usually the top. Extreme greed shows up in surveys, in the positioning of retail and institutional traders, and even in the VIX - which tends to hover at unusually low levels right before volatility explodes.
The market tops not when things are bad, but when things are so good that nobody sees a reason to prepare. That’s when the smart money quietly starts heading for the exits.
After the initial cracks start to show, we enter what I call the “Disbelief Stage” - and it’s one of the most deceptive parts of a bear market.
This is the period where investors don’t want to believe the bull market is over. The talking heads are still looking for silver linings, and just about everyone is still leaning on the old playbook: “buy the dip.”
You’ll hear things like “this is just a healthy correction,” or “stocks are on sale,” or “this is just like 2018.” The problem is—it’s not. The technical trends have already turned, fundamentals are starting to weaken, and sentiment hasn’t caught up with reality yet.
Instead of selling or reducing exposure, most investors freeze. They keep holding on, convincing themselves it’ll bounce. And that behavior ends up being the costliest part of the entire cycle.
The market will tease you here with sharp rallies—what we call bear market bounces. They’re fast, they’re convincing, and they can retrace 50% or more of the losses in just a few days. But those bounces are traps. They suck investors back in, only to roll over and make new lows.
This is the phase where discipline matters most. The data is screaming “something’s wrong,” but emotions says, “hold on, it’ll all come back.” Knowing how to read the trend—and not just the narrative—is what separates the survivors from the bag holders.
Eventually, the market enters what I call the “acceptance phase.” This is where hope gives way to reality—and for most investors, it’s the most painful part of the entire bear market.
From a technical standpoint, this is the moment when the S&P 500 crosses decisively below its 20 - month moving average. That line is often referred to as the “line of demarcation” between a long - term bull and a long - term bear market. Once prices fall below that level and stay there, the trend has officially changed.
And the rest of the market finally starts to catch on.
This is when Wall Street analysts begin to lower their price targets—not just for individual stocks, but for entire sectors. Companies start guiding earnings expectations lower, economic data begins to weaken more consistently, and you see headlines shifting from optimism to concern. In short: the news starts to reflect what the charts have been saying for months.
Investors who were once just holding on now begin to actively sell. And it’s not just the retail crowd—institutions start de - risking portfolios, too. Redemptions pick up. Volumes surge. The market’s daily moves grow more violent.
This is the stage where the crowd finally moves in unison. Investors aren’t selling to reposition anymore—they’re selling to protect what’s left. It becomes a race for preservation.
And while it may not feel like it at the time, that kind of mass capitulation is actually a good signal that the bear market is entering its final stage.
The last stage of a bear market is the one nobody wants to talk about—but every investor ends up feeling. It’s the phase of disgust, or what some call extreme fear. This is when the damage has been done. Investors aren’t just selling anymore—they’ve stopped looking altogether.
After months of failed rallies, lower lows, and emotional exhaustion, the average investor finally throws in the towel. They’re not just moving to cash. They’re saying, “I’m never buying another stock again.”
And that’s exactly when things start to turn.
The irony of the disgust phase is that it’s the most powerful setup for long - term investors. By the time this point is reached, most of the selling pressure has already played out. There’s no one left to panic. And that creates what I call a selling vacuum, a wide-open runway for stocks to start grinding higher with little resistance since everyone has already sold everything.
It’s also the point where the smart money moves in.
Institutional investors, hedge funds, and top-tier asset managers know the pattern. They’ve seen it before. While retail investors are still licking their wounds or sitting in cash, the pros are quietly buying the leaders, rotating into growth names, and positioning for the early stages of the next bull market.
This is how they beat the crowd every single time—they don’t wait for the all - clear. They buy when risk feels highest… because they know that’s when reward is highest too.
If you’re a long-term investor, this is the moment you’ve been waiting for. It doesn’t feel good, and it never will. But that’s the nature of bottoms—they always arrive in an environment where nobody wants to believe they’re real.
At the end of April 2025, we’re clearly crossing an important threshold in the current market cycle - and the signs are getting harder to ignore.
The S&P 500 has officially broken below its 20 - month moving average. That’s more than just a technical signal - it’s a long - term trend break. When this line gets crossed decisively, history shows that we’re no longer dealing with just a correction. We’re in a bear market. Period.
Adding to the pressure, both the S&P 500 and the Nasdaq 100 just triggered fresh death cross patterns last week. For those unfamiliar, a death cross occurs when the 50 - day moving average crosses below the 200 - day moving average. It’s a strong technical warning that short - term momentum has turned lower and that selling pressure is likely to increase over the medium term.
These aren’t just visual patterns on a chart - they have real - world implications. Historically, death crosses mark the early stages of prolonged drawdowns. In this case, they suggest that negative momentum is accelerating across the broader market and the largest tech stocks alike, setting the stage for further losses over the next three to six months.
That timeline is especially important, because it lines up with one of the seasonally weakest stretches of the year. As we head into the summer months, volume tends to dry up, volatility increases, and investor patience gets tested.
Layer on rising political uncertainty, softening earnings guidance, and a shift in analyst tone - from “buy the dip” to “play defense” - and you’ve got the full setup of a market moving deeper into the acceptance phase.
We’re no longer speculating about whether this is a bear market. The market has already answered that question.
Now that we’re firmly in the acceptance phase of the bear market, it’s important to start thinking in terms of targets—not just for defense, but for opportunity.
Below are the levels I’m looking at as realistic bear market targets for the major indexes and some of the most widely held stocks in the market today. These aren’t panic numbers - they’re technically and historically reasonable prices based on past bear market drawdowns, valuation resets, and current momentum.
These levels reflect where I believe prices could realistically land during the most intense phase of the bear market - when fear is peaking and sellers have exhausted themselves.
For the indexes, these targets represent multi-month support zones that align with pre-rally consolidation areas or major Fibonacci retracement levels. In individual stocks like NVIDIA or Tesla, the targets suggest a reversion to more sustainable valuation levels based on normalized earnings and slower growth assumptions.
Keep in mind, hitting these targets doesn’t necessarily mean the market will bottom there. But they do offer a roadmap - a set of expectations that can help investors make informed decisions rather than emotional ones.
When these targets begin to line up with improving technical setups, capitulation-level sentiment, and stronger fundamentals, that’s when it’s time to start thinking about offense.
In a bear market, your number one job is simple: protect your capital.
You don’t have to beat the market. You just have to lose less than everyone else—and be ready to take advantage of the rebound when it comes. That’s why building a bear market survival portfolio isn’t about swinging for the fences. It’s about getting lean, getting defensive, and focusing on staying power.
Here’s how I’m approaching that:
In times like these, growth takes a back seat to reliability. That’s why I like sectors that hold up when the economy slows:
Cash is no longer trash. In a rising rate environment, cash gives you flexibility—and more importantly, it gives you time to wait for real opportunities. Short-term Treasury ETFs like SGOV or SHY are earning a yield again, with less risk than holding longer-dated bonds.
Gold has regained its role as a safe harbor.
Whether it's inflation, war, or a crisis of confidence, gold tends to benefit when investors panic.
ETFs like GLD or IAU provide liquid exposure without the hassle of storing physical metal. If you’re looking for more leverage, the gold miners (GDX, GDXJ) can offer increased upside during rebounds.
If you're more active, this is the time to consider tactical hedging. Inverse ETFs like SH (short S&P 500) or PSQ (short Nasdaq 100) give you bearish exposure without margin risk. Alternatively, long-dated put options can act like insurance against further declines in positions you’re not ready to sell.
If a stock isn’t holding up now, it probably won’t lead in the next bull market. Start getting comfortable with the idea of letting go. On the other hand, stocks that are holding above support, showing relative strength, or consolidating instead of collapsing—that’s the market telling you where future leadership might come from.
Starting today, I’m introducing three new model portfolios designed specifically for this bear market environment—one focused on surviving the volatility and preserving capital, and the other built to thrive once the next bull market begins to take shape.
I’ll be updating both portfolios at the end of each month, along with a short market recap that highlights what’s changed, what’s working, and what we’re watching next.
These aren’t just static watchlists—they’re evolving playbooks.
When the time is right, we won’t be scrambling—we’ll be ready.
