Bear Market Looms: Brace for Impact

The U.S. stock market is already in or very close to bear market territory, with the average stock on the NYSE down 29% from its recent highs. Transportation stocks, biotech ETFs, and semiconductor ETFs have all experienced significant declines, signaling stress in the economy. Even some of the largest market cap stocks, known as the "Magnificent Seven," have started to decline. The author suggests maintaining a defensive portfolio allocation until it becomes clear that the economy is heading into a recession and the next bear market is imminent. They are closely monitoring the S&P VIX Index and plan to make more significant moves on the long side when the VIX reaches the 35-40 range, indicating panic and capitulation in equities.