This articles discusses the common debate on if a bear market rally is still usefull or not.

If the market is bearish and stocks begin to turn around you will begin to here one argument.  This argument is whether or not this is a “bear market rally” or is it actually a full trend reversal into a bull market rally? Investors and stock analysts will debate all day long about which rally is occurring, bear or bull.  Analysts and advisers alike will often tell people to NOT BUY (long) in a bear market.  The reason being that it is a general rule to not bet against the market.  What I believe is that this is not necessarily the smartest thing to do.  If you spot a stock that you believe will rally soon, buy it.  Regardless of the market’s overall trend.  Everyday there are stocks which rise while the overall market falls.  If you see a rally coming I propose: why not make money on it?  Why would you not invest in a stock that will make you money?  Simply because the rest of the market is not in a bull trend?  Does that make sense?  Even the great Jim “Booyahhh” Cramer has recently commented on this common misconception.  Just because the rest of the market has taken a slip or is in a bear market this is no reason for not making money.  There is no wrong buy in a rally.  If you buy and the rally is in a bear market, you will take profits after the stock reaches a certain amount.  If the market reverses and the rest of the market comes along with your stock then you will once again sell to make a profit.  You will trade the two rallies identically accept that in the latter you would have called a market bottom and locked yourself in for the most possible profits.  In the former you would have made yourself a profit while everyone else was trading with the market and losing money. Either way, congratulations on some great trading. 

Consider the chart below:

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CELG (Celgene Corp) is a bio-pharmaceutical company which mainly focuses on discovering new treatments for cancer.  As you can see, as the market was sinking to record lows in mid 2008 this stock was reaching 10 year highs.  It is also true that while the rest of the market has recover this particular stock has dropped.  This is due to valuation issues most likely but this is neither here nor there.

So while people are debating whether or not the market is setting up for a large correction, (you can read why I think this will not happen in this article) you can now be sure that whether the market goes bear or bull you should be trading rallies.  Don’t trade with the market, trade with the rallies.  You can also read in my recent article why and how you can trade with a HUGE rally in health care stocks.  The health care article can be found here.

AlI also recomend this piece written about the price of crude oil. The article helps you know where the price will be headed and why. 

always remember that investing is very risky and that the author is not responsible for any decisions you make after reading this article.

Good luck!