PULL-BACKS, CORRECTIONS, AND BEAR MARKETS

A Pull-Back is a move where the market interrupts the prevailing bullish trend, or retraces from a breakout, but does not retrace beyond the start of the trend or the beginning of the breakout. A pull-back which declines further to the beginning of the trend or the breakout would instead become a reversal or a breakout failure and becomes a Correction when the decline exceeds 10% and a   Bear Market when the decline exceeds 20%. 

DISTRIBUTION: Distribution is indicated by one or more of the major market indexes decline on increased volume from the previous day. Churning in the market indexes is also a sign of distribution. This occurs when a day's attempted advance stalls (shows very little change in price) on greater volume than the day before. 

BEAR MARKET CONFIRMATION: Four days of distribution, if correctly spotted over a two or three week period are often enough to turn a previous advancing market into a decline. The beginnings of a bear market usually follow a "test" of the previous bull market high on low volume followed by sharp declines on high volume. The confirmation date of a bear market is the date prices on both the DOW and TRANSPORTS break below the low point of the last bull market correction and continue to move downward.