If we are replaying the 1970s, then stocks are in a bear market rally.
Based upon this and cheap valuations, a bear market rally was the logical next move for stocks.
The first bear market rally of the 2007-2009 bear market had ended 3 days earlier on Dec. 10.
Stocks will have a bear market rally up to a 11, 000 to 13, 000 Dow over the next several months.
If so, that would be more characteristic of a bear market rally rather than a new once-in-a-lifetime bull market.
The bear market rally from the March 2008 lows terminated in May, as noted in a recent Week Ahead column.
He still believes that we have been experiencing a Bear Market rally his negative stance has hurt his 2009 and 2010 performance .
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By June of 2008 it was clear that the bear market rally was over, and on July 15, the number of new lows hit a high of 1144 (see circle).
The poll reached 54.6% bullish in October, 2007, at the top of the 2003-2007 bull market, and 53.3% bullish on May 1, 2008, two weeks before the top of the 2008 bear market rally .
Perhaps it is, but my take on it was that the additional plunge was sure to create another rally attempt off the oversold condition, but one that was likely to be only a brief bear market rally that would run into serious resistance at the 30-day m.a. again.
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The more difficult question to answer is whether the surge is the start of a long-term bull market or simply yet another bear-market rally, like those Japan enjoyed in the 1990s.
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The SPY retested the January lows in March (point 3), setting the stage for a bear-market rally.
In 2008, there was a classic bear-market rally from the March 2008 lows that ended in May.
Three down days in October that took KFT into bear market territory briefly were followed by a rally during which shares of KFT closed higher for eight days in a row, gaining more than 7%.
This is now, by every measure, the most intense rally over 24 months following a bear market.
Tuesday's rally, which nudged the Dow up 87 points, or 0.6% to 15056.20, was the latest accomplishment for a four-year stock rally that has sent the Dow up nearly 130% without suffering a single bear-market downturn typically defined as a decline of 20% or more from a recent high.
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