Monday, March 23, 2009

Putting my method to the test

After bouncing off of the declining tops trend line on Friday, the S&P 500 index plowed through 800 today on the way to a 7.1% rally.

This is the umpteenth example of a single-day large rally accompanied by optimism in this bear market, and after every previous example the market eventually reached a new low.

Obviously I couldn't predict the news events on Wednesday (the Fed buying Treasury bills: $300 billion) or today, (the Treasury buying bad bank assets: $1 trillion) and I'm pretty sure that these have sustained the rally up to this point against the headwind of market optimism.

I've wired some new money to my Roth IRA to take advantage of lower GRZZX prices, but I won't count this new purchase towards my track record here on this blog.

By the way, one of my end-of-bear-market signals would trip if the S&P 500 closed in the vicinity of 850, which is less than 4% higher than today's close of 823. I won't say anything more about that unless and until it happens.


Anonymous said...

Ride those waves Jody.

I'll bet a few of us reading your blog feel like the guys on the ground at Mission Control as Neil Armstrong was landing the LEM on the moon for the first time.

Turning blue, here ;0)

Catherine W.

Anonymous said...


Up and down. Up and down. As always in the past, with sudden, big ups, there will follow deep deep downs.

The true end of the Bear is a gradual weekly rise with it's only minimal ups and downs, right?

Your insight, your gentle assurance, and your humor are our beacon during this sea-sickening UP and DOWN...

Jody Wilson said...

Bear markets can end with big up moves, but I'm more inclined to trust the endurance of a rally when short-term investors are pessimistic rather than optimistic like today.

Anonymous said...

Anyone else wishing they bought back in at 6,600?

Jody Wilson said...

Dear brave "Anonymous,"

A wish and $4.00 will get you a cup of coffee at Starbucks.