Is the market on steroids???

By: ispeculatornew
Date posted: 03.24.2009 (4:04 am) | Write a Comment  (3 Comments)

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strongarmHave you been standing on the sidelines for the past 10 days? Sure you were probably proud a couple of weeks ago to say that your investment fund was all cash, but if that was the case, then I’m sorry to tell you that you have just missed the biggest 10 day return since 1938.

The market is now up 22% from its low and it seems like there was no way to get it wrong as all major components and sectors advanced in the past 2 weeks. Only today, the S&P 500 advanced more than 7%, an incredible feat no matter what the circumstance.

Of course, the title of this post was chosen to get some reactions but it is also because we are very surprised of this rally. We had long positions but it is still very surprising to see the market rise so much. Let’s face it, in terms of the economy, there is little to celebrate and so there is little hope of rising corporate earnings. So we are not entirely certain what is causing this rally. Is there a little less uncertainty about the direction of the Obama economic team? Yes, to an extent and of course this helps the markets. But enough to justify such an advance? Certainly not in my opinion.

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  1. Comment by OneDay — March 24, 2009 @ 2:17 pm

    That’s true! The performance was good for the past 2 weeks *Huuummm* However Nasdaq and S&P500 finished down 2% today 🙁

    “Will the Geithner Plan Work?” The NY Times asked.

    We don’t know. Although encouraging, the plan is no guarantee for success. The plan is based on the participation of all banks. Banks would have to offload their toxic assets at a “value price”, that would also mean additional losses… Would banks ready for that?

  2. Comment by IS — March 24, 2009 @ 7:19 pm

    yeah, it was a bit expected to have a down day…but we’ll see how markets react for the rest of March, it’s still looking a lot better right now than a month ago…

  3. Pingback by LinkStuff for Friday, Mar 27 — March 27, 2009 @ 8:28 am

    […] The Intelligent Speculator wonders if the market is on steroids. […]

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