Is This Rally Real?
Posted by
Sun on
March 21, 2009
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Since closing at 6,547.05 on March 9th, the Dow Jones Industrial Average gained back more than 11% in the past 9 trading sessions to recoup some of the losses. The rally was partly fueled by financial stocks after two of the nation’s three largest banks, Bank of America (BAC) and Citigroup (C), made bullish comments on their first quarter profit. Both BAC and C surged after reaching all time lows on March 5th, gaining 97% and 135%, respectively.
But is this rally real? Or just a temporary bounce in a bear market that’s still search for the bottom?
In this INO educational video, Market Club analyst examined recent market actions from the technical point of view to see whether the rally is the beginning of a upside reversal, or not.
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it’s temporary. we have some wild swings coming up through the summer. don’t see anything really stabilizing until late 09 early 10
I agree that this rally is temporary. If it didn’t end last Friday, it surely will after Secretary Geithner shares the Treasury’s toxic asset purchase plan. After Congress has villified AIG, I don’t think many private investors will participate in any government subsidized plan to purchase toxic assets.
It looks like this time investors like Geithner’s plan better than last time when he spoke (last time the Dow as down 380 points, today up nearly 500 points). But still more time is needed to see whether this is a bottom or not.
i’m not so sure it was geithner’s plan, as much as the increase in existing home sales numbers. the govt still has to get private investors locked in, and i will tell you i sure the heck wouldn’t want to invest if there is a repeat of last week. moreover, don’t forget, obama has included capital gains tax hike by 2011, which people seem to forget about. so another problem i see here is that if private capital comes in, we will see a sell off before the projected tax hikes. i think the only way private investors are going to come in is if they can make a very quick buck on it and then flee from it because out of fear congress and admin will retroactively change the terms and/or fear of higher taxation on capital gains.