Last week I noted that the market was poised for more losses on bearish technicals. If you took the trade you should've already closed your position with a decent gain. There's zero reason to hold much of anything over the weekend, despite today's last hour rally into the close. Who are these folks that are itching to buy after such news?
![[Chart: S&P 500 Index]](http://www.poorbrothertom.com/blog/sites/www.poorbrothertom.com/files/SPX20081121.png)
![[Chart: Dow Jones Industrial Average]](http://www.poorbrothertom.com/blog/sites/www.poorbrothertom.com/files/INDU20081121.png)
This is not to say I think you should be out there shorting on fundamentals. I don't. This analysis of previous "down 40%+" bear markets lays out the historical precedent for rather sharp rallies after breaking the 40% floor. Of the last nine times the Dow hit these levels, it rallied significantly eight times. The one exception being the Great Depression. Strangely, that author seems to think a second Great Depression is upon us, rather than considering that data point as anomalous.
![[Chart: NYSE Composite]](http://www.poorbrothertom.com/blog/sites/www.poorbrothertom.com/files/NYA20081121.png)
![[Chart: NASDAQ Composite]](http://www.poorbrothertom.com/blog/sites/www.poorbrothertom.com/files/COMPQ20081121.png)
Government policy doesn't create lasting bull moves and we're too far down now to bet on further significant index declines unless you buy into the whole next Great Depression thesis.
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This is not to say I think
This is not to say I think you should be out there shorting on fundamentals. I don't. This analysis of previous "down 40%+" bear markets lays out the historical precedent for rather sharp rallies after breaking the 40% floor.- Thank you
Submitted by billigflüge (not verified)
on 11 April, 2009 - 05:21
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