Friends
The bulls were able to muster a little bit of a rally today with the beleaguered Nasdaq leading the way higher. Stocks had gotten very oversold on a technical basis, so a counter trend rally was due at any moment. This wasn’t one of those monster moves that make you really take notice, but maybe that’s better. Instead of a one day blow off, the bulls need to string together a series of up days and subsequently up weeks. Until proven otherwise, all rallies should be considered bear market rallies. Eventually, there will be a rally that gains traction and the current trend can be reversed.
By the close, the Dow Jones Industrial Average was up 466 points to finish the day at 32,196. The S&P 500 was up 93 points to close at 4,023. The Nasdaq Composite Index was up 434 points to close at 11,805. Gold was down $16 to trade at $1,807 per ounce, while oil was up $4.16 to trade at $110.29 per barrel WTI.
Again, we don’t know how long this bear market will last or how deep it will go. But, given the circumstances the duration of this particular bear market might be better measured in time than in price. The process of the Fed’s monetary pivot and the uncertainty as to its affects will take time to play out. Indeed, monetary policy has a delayed effect on the economy. It just might take some time to see what is working and what is not. Unlike recent vicious, but short-lived downturns (March 2020), this one just might take a little longer to play out. But play out, it will.
Have a great weekend everyone.
