Strength in the Dow has masked an ongoing massacre in the wider market. The Value Line Composite Index, for example, which comes far closer to reflecting an average stock portfolio, has utterly collapsed and is heading for its 1987 crash low. One guideline for analysing very long term stock market action that's been reliable for most of this century has been the dividend yield on the Dow Jones Industrials. In a recession, of course, dividend decreases are the norm, so an even lower target would be expected. Interestingly, two other unrelated measures suggest a target in the same range.
Bear markets have a tendency to erase half the gains of the preceding bull market.
If you look at the entire 15 year bull market that carried to Dow from 577 in 1974 to 3000 in 1990, the halfway point is in the 1780s. Finally, the crash low of 1987 was 1738, with a secondary low of 1766 recorded in December of 1987. These lows have not been revisited in the subsequent years. If you believe I may be right about the bear market and expect it to follow the historical pattern of past bear markets, then we should keep the cash in the money bin until the bear brings prices down. Bear markets, once underway, tend to accelerate and exceed even the most carefully calculated downside targets.