Thursday, November 13, 2008

Twofer Thursday

Today the S&P 500 index passed below 820 for the first time since October 2002 (a new low), and then rallied 11% in only 3 hours to close at 911 (an insane rally).

The bear market continues.



5 comments:

Dan said...

Jody,

Just curious - why do people buy stocks on the long side and hold them overnight or even hold onto them during the day when the DOW rallies more than 300 points - don't most know that a 300 pt rally has only occured during bear markets? Can you add any logic to these types of moves?

Jody said...

Most investors are neither market-timers nor day traders, and don't have the time to learn what various market patterns mean. To the extent they do any research at all, it's turning on CNBC to see a talking head exclaim "Wow! The market is up today! Could this be the bottom?"

D said...

There are two sides to every trade. "we" have been providing liquidity to the dumb money for them to be able to sell at these lower prices and "we" will unload their positions back to them at much higher levels as everyone thinks the worst is behind us...

the worst is in front of us, just not yet.

:)

Dan said...

Jody,
It just surprises me that these so called "investors" actually behave this way.

Thanks again!

Anonymous said...

Thought today was starting to look like a repeat of yesterday. All looked good at 3pm. Ouch. Anyway, can anyone explain the Dow Futures to me? Currently, its is reporting a 459 point loss, yet has the value at 8,371... which is not 459 less than the Dow's close today. Here is the page I am looking at: http://www.bloomberg.com/markets/stocks/futures.html
Hate the ultra fund I am stuck in right now, but at least I am learning I guess.