Does bull/bear market actually make a difference?
"Who are the losers going to be? If you can tell me for certain which firms will do worst in a bear market and can time it so that this information is not already priced into the market then you can make money. If not don't try. In a bull market stocks tend to act ""normally"" with established patterns such as correlations acting as expected and stocks more or less pricing to their fundamentals. In a bear market fear tends to overrule all of those things. You get large drops on relatively minor bad news and modest rallies on even the best news which results in stocks being undervalued against their fundamentals. In the crash itself it is quite easy to make money shorting. In an environment where stocks are undervalued, such as a bear market, you run the risk that your short, no matter how sure you are that the stock will fall, is seen as being undervalued and will rise. In fact your selling of a ""losing"" stock might cause it to hit levels where value investors already have limits set. This could bring a LOT of buyers into the market. Due to the fact that correlations break down creating portfolios with the correct risk level, which is what funds are required to do not only by their contracts but also by law to an extent, is extremely difficult. Risk management (keeping all kinds to within certain bounds) is one of the most difficult parts of a manager's job and is even difficult in abnormal market conditions. In the long run (definitions may vary) stock prices in general go up (for those companies who aren't bankrupted at least) so shorting in a bear market is not a long term strategy either and will not produce long term returns on capital. In addition to this risk you run the risk that your counterparty (such as Lehman brothers?) will file for bankruptcy and you won't be able to cover the position before the lender wants you to repay their stock to them landing you in even more problems." "To short:  Of course, you may always buy some index correlated ETF that eliminates the above. They use stock futures on the index, and you simply buy the ""shorting ETF"" in your non-margin account. However, they are surprisingly high cost, and despite the intended correlation, have significant drag. It's a much safer way to short the market (you have great choice in which market ETF) and eliminates the single stock risk." "The main difference between a bull market and a bear market is due the ""the leverage effect"". http://www.princeton.edu/~yacine/leverage.pdf The leverage effect refers to the observed tendency of an asset’s   volatility to be negatively correlated with the asset’s returns.   Typically, rising asset prices are accompanied by declining   volatility, and vice versa. The term “leverage” refers to one possible   economic interpretation of this phenomenon, developed in Black (1976)   and Christie (1982): as asset prices decline, companies become   mechanically more leveraged since the relative value of their debt   rises relative to that of their equity. As a result, it is natural to   expect that their stock becomes riskier, hence more volatile. More volatile assets in a bear market are not such good investments as less volatile assets in a bull market." If you know what you are doing, bear markets offer fantastic trading opportunities. I'm a futures and futures options trader, and am equally comfortable trading long or short, although I have a slight preference for the short side, in that moves are typically much quicker to the down side.
The first statement is talking about a sudden sharp increase in volume (double or more of average volume) with a sudden increase in price. In other words, there has been a last rush to buy the stock exhausting all the current bulls (buyers), so the bears (sellers) take over, at least temporarily. Whilst the second statement is talking about a gradual increase in volume as the price up trends (thus the use of a volume oscillator). In other words (in an uptrend), the bulls (buyers) are gradually increasing in numbers sending the price higher, and new buyers keep entering the market. (The opposite is the case for a down-trend). "There is no zero risk option! There is no safe parking zone for turbulent times! There is no such thing as a zero-risk investment.  You would do well to get this out of your head now.  Cash, though it will retain its principle over time, will always be subject to inflation risk (assuming a positive-inflation environment which, historically in the US anyway, has always been the case since the Great Depression). But I couldn't find a ""Pure Cash - No investment option"" - what I mean by this is an option where my money is kept idle without investing in any kind of financial instrument (stocks, bonds, other MFs, currencies, forex etc etc whatever).  Getting back to the real crux of your question, several other answers have already highlighted that you're looking for a money market fund.  These will likely be as close to cash as you will get in a retirement account for the reasons listed in @KentA's answer. Investing in short-term notes would also be another relatively low-risk alternative to a money market fund.  Again, this is low-risk, not no-risk. I wanted such kinda option because things may turn bad and I may want nothing invested in the stock markets/bond markets. I was thinking that if the market turns bear then I would move everything to cash Unless you have a the innate ability to perfectly time the market, you are better off keeping your investments where they are and riding out the bear market.  Cash does not generate dividends - most funds in a retirement account do.  Sure, you may have a paper loss of principle in a bear market, but this will go away once the market turns bull again.  Assuming you have a fairly long time before you retire, this should not concern you in the slightest. Again, I want to stress that market timing does not work.  Even the professionals, who get paid the big bucks to do this, on average, get it right as often as they get it wrong.  If you had this ability, you would not be asking financial questions on Stack Exchange, I can tell you that. I would recommend you read The Four Pillars of Investing, by William Bernstein.  He has a very no-nonsense approach to investing and retirement that would serve you (or anybody) well in turbulent financial markets.  His discussion on risk is especially applicable to your situation." For a cheaper hedge , you can try a call spread. e.g if you shorted a stock at 40 but are worried that it can get bought out for 60. then buy a 50-60 bull call spread with appropriate number of contracts or even 50-55. this is better than just buying a 50 call as it will be expensive. Also the other option is not to short but buy a debit bear put spread 40-30 near the money and then buy an out of money call spread ( 55-60). "I feel that OP's question is fundamentally wrong and an understanding of why is important. The stock market, as a whole, in the USA has an average annualized return of 11%. That means that a monkey, throwing darts at a board, can usually turn 100K into over three million in thirty-five years. (The analog I'm drawing is a 30-year old with 100K randomly picking stocks will be a multi-millionaire at 65). So to be ""good"" at investing in the stock market, you need to be better than a monkey. Most people aren't. Why? What mistakes do people make and how do you avoid them? A very common mistake is to buy high, sell low. This happened before and after the 08's recession. People rushed into the market beforehand as it was reaching its peak, sold when the market bottomed out then ignored the market in years it was getting 20+% returns. A Bogle approach for this is to simply consistently put a  part of your income into the market whether it is raining or shining. Paying high fees. Going back to the monkey example, if the monkey charges you a 2% management fees, which is low by Canadian standards, the monkey will cost you one million dollars over the course of the thirty-five years. If the monkey does a pretty good job it is a worthy expenditure. But most humans, including professional stock pickers, are worst than a monkey at picking stocks. Another mistake is adjusting your plan. Many people, when the market was giving bull returns before the 08's crash happily had a large segment of their wealth in stocks. They thought they were risk tolerant. Crash happened, they moved towards bonds. Then bonds returns were comically low while stocks soared. Had they had a plan, almost any consistent plan, they'd have done better. Another genre of issues is just doing stupid things. Don't buy that penny stock. Don't trade like crazy. Don't pay 5$ commission on a 200$ stock order. Don't fail to file your taxes.  Another mistake, and this burdens a lot of people, is that your long-term investments are for long-term investing. What a novel idea. You're 401K doesn't exist for you to get a loan for a home. Many people do liquidate their long-term savings. Don't. Especially since people who do make these loans or say ""I'll pay myself back later"" don't." "Not really. High frequency traders affect mainly short term investors. If everyone invested long-term and traded infrequently, there would be no high frequency trading. For a long term investor, you by at X, hold for several years, and sell at Y. At worst, high frequency trading may affect ""X"" and ""Y"" by a few pennies (and the changes may cancel out). For a long term trader that doesn't amount to a ""hill of beans"" It is other frequent traders that will feel the loss of those ""pennies.""" I don't think that's the case.   I mean, of course some of the new money supply is making it into the stock market, but I think it's because of the factors I listed. The money supply isn't growing faster now than it has in the past.   Here is M2 since 1980 on a log scale (because a percent change is more relevant than a change in raw dollars, just like stock market returns).  https://fred.stlouisfed.org/graph/?g=fxeb  (I am using M2 because it's a more complete measure of liquidity)  Here is the percent change over time in M2, just to show that the QE isn't really doing anything out of the ordinary.  https://fred.stlouisfed.org/graph/?g=fxek  Here you can see the inflation rate:   https://fred.stlouisfed.org/graph/?g=fxes  What quantitative easing has done is drive bond prices lower, which I already mentioned. It can also be argued that QE has expanded wealth inequality, but I already mentioned that as well. https://www.forbes.com/sites/jonhartley/2015/06/25/how-federal-reserve-quantitative-easing-expanded-wealth-inequality/#1f7528a321eb No, and using a 37 year old formula in finance that is as simple as: should make it obvious technical analysis is more of a game for retail traders than investment advice. When it comes to currencies, there are a myriad of macroeconomic occurrences that do not follow a predictable timescale. Using indicators like RSI on any time frame will not magically illuminate broad human psychology and give you an edge. It is theoretically possible for a single public stock's price to be driven by a range of technical traders who all buy at RSI 30 and sell at RSI 70, after becoming a favorite stock on social media, but it is infinitely more likely for all market participants to have completely different goals. The satisfaction from gains packs less of an emotional impact than the fear of loss. It's very difficult for many people to overcome this fear, so when prices begin to fall, many investors sell to minimize their potential loss. This causes a further drop, which can lead to more selling as other investors reach their emotional threshold for loss. This emotion-based selling keeps the market inefficient in the short term. If there aren't enough value investors waiting to scoop up the stock at the new discount, it can stay undervalued for a long time.