SMI’s Bear Alert indicator officially triggered this past Friday. That simply means the S&P 500 put in its first weekly (Friday) close at a level more than -15% below the prior high.
The Bear Alert signal doesn’t carry much significance anymore. We created it as a rough tool following the 2000-2002 bear market, at a time when the SMI strategies had no other formal defensive capabilities. But in 2013 we unveiled the Dynamic Asset Allocation strategy as a first line of defense for our portfolios, and the Upgrading "2.0" defensive protocols followed in 2018 as an additional measure to protect against deep/prolonged bear markets. Now that we have these better-developed tools, we no longer utilize the Bear Alert as a guide.
That said, we know there are some SMI members that still like to know when it triggers. Still, we suggest that most SMI members use the more finely-tuned tools within DAA and Upgrading 2.0 for this type of defensive guidance. See the articles in the sidebar if you’re unfamiliar with these strategies and want to learn more about how to utilize them to protect your portfolio.
