Bear Market Rallies Are Nasty Creatures

The bear market rallies of 2001-’02 were remarkable one-day wonders. I remember our multi-billion portfolio ramping +5% some days, only to give it all back over the next week.

If you need a confirmation were are still in a bear market, the recent price action might be a clue. Of course, it could be the start of something similar to March 2003, when stocks began a long ramp. Keep an open mind, but I am thinking bear market rally for now.

Jeff DeGraaf of ISI Group suggested it was possible we could trade to 1320 on the S&P 500, and was keeping a close eye on the 121.50 level in crude. We are quickly moving into overbought territory, but DeGraaf suggested the rally could endure until 80% of stocks traded back above their 5o-day moving averages.

In the video below Matt Davio of Misstrade.com lays out his thesis, which is admittedly shorter term in nature than DeGraaf’s. Matt has been experimenting with the live streaming at USTREAM, and will continue to fiddle with the technology that can turn every blog into a long-tail, and more intelligent version, of CNBC.

Of course, if you are a fan of financial videos, go to my main page and check out Trader Hell. Warning, extreme language as a BuySide Trader gets ripped a new one.

Webcam chat at Ustream

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The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

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