November 30, 2008- Market Summary
In our last report, we mentioned that the markets were in an interesting position from a technical analysis standpoint. We noted that the major indexes, such as the S&P 500, reached their lowest levels since 1997. This past week, things began to turn around as news of a continued bailout of the U.S economy drove the Dow to its first four-day rally since April. What is even more significant is that the Dow rallied 17% in the previous five sessions, marking the largest percentage gain since 1932 and the best five-day point gain on record. The impressive bull rally has many traders worried about a potential pullback, while others are taking the strength as a sign of a market bottom. We think that the high level of volatility that has been present in the markets, combined with weakening fundamental data, makes it extremely dangerous for anyone to predict how long buying pressure will last. The safest bet is probably to remain on the sidelines.
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