I keep having a lot of problems about market direction. I try to learn and apply for my investment. I seems to be complicated at this stage. I have read Mr. O'Neil book how to make money in stock . He mentioned about some signals to end a bull market.The early bear market signals such as top rated stocks had third or four stage with faulty base. The example of those rated stocks were apple, arun(failed after breaking out).

Another sign of abnormal activity is the "climax" top. a leading stock will rup more rapidly for two or three weeks in a row, after having advanced for many month. Those stocks were APKT, ARMH.

But he also mentiioned that bulls & bears do not end easily. One of the example in 1969 and 1974, a few of these phony, drawn-out rallies lasted up to 15 weeks. Most don't last that long. Mr.O'Neil did not have much problem recognize and acting upon the early signs of the many bear markets from 1962 through 2008.

Also Mr. Scott O'Neil mentioned in the letter that we are in the late stage of the market.

Today actions of top rated also went down with heavy volume without any support.

Does anyone know that if we are in the early sign of bear market? Please help. Thanks

Loc,  The market was down today on greater volume than Friday's volume.  So we had a distribution day.  The distribution days are stacking up.  I would imagine when the Big Picture comes out this evening; we will be in “Market Under Pressure”.  Yes a lot of leading stocks got hit hard today.  And a lot of leading stocks showed strength. Like “DECK”.  The “Stocks on the Move” article on the web page did show positive stocks…  I believe most were energy related….  So all the news is not totally negative.  We will just have to wait and see if we have made a top or not.  No one will know, before we all know.  Now, you need to be taking the price and volume action of the indexes very seriously and be very prudent with your stocks!  If you have good gains you are afraid will evaporate, then take the profit.  If you have new buys that are negative, sell ASAP.  The problems in the Middle East could correct themselves very quickly and we could be back off to the races again.  But I do not think so.  They are very serious.  And whether or not if effects our economy immediately and directly, investors are forward looking individuals, and the problems in the Middle East will sooner or latter effect our economy if they drag on.  So to try to answer your question.  Do we see early signs of a bear market? Sure we do.  But we also see signs of strength.  So just follow William O’Neil’s book and his rules…  Meaning, do not buy new purchases unless the action of the price and volume of the indexes say it is OK to buy.  And the way I see it.  They are not saying it is OK to buy right now!  Don

A lot of leading stocks showed strength ? I wish I knew and had some of those leaders !

I think it is still to early to know. When the leaders like BIDU,NFLX,AAPL and PCLN start breaking their 10 week averages then I would start worrying. Also watch if the Nasdaq can hold The 10 week as well. This second leg of this bull went up over 35 % and things were getting out of hand. We could easily correct over 10% in the future .

Ok, maybe it was not a lot of leading stocks.  But it was a few at least. And the more I look, most of them were energy.  And that is what you would see in an energy inflation environment.