Wednesday, October 01, 2008

Typical turbulence

The bumpiest part of any trip over a waterfall is at the bottom, and the same is true for any large decline in the stock market. The current leg of the bear market began on August 11 at S&P 1305, and was as low as 1106 (-15%) after the market close on Monday. The big bounce on Tuesday (+5.2%) following Monday's historic plunge (-8.8%) dovetails with the theory that the market is near a short-term bottom.

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