Why the Dow's jump today is NOT good news

[scheming daemons]

The DJIA Top 11 Biggest % Gains of all time:

1. March 15, 1933 … 15.34%
2. Oct. 6, 1931 ….. 14.87%
3. Oct. 30, 1929 …. 12.34%
4. Sept. 21, 1932 … 11.36%
5. Oct. 13, 2008 …. 11.08%
6. Oct. 28, 2008 …. 10.88%
7. Oct. 21, 1987 …. 10.15%
8. Aug. 3, 1932 …. 9.52%
9. Feb. 11, 1932 …. 9.47%
10.Nov. 14, 1929 …. 9.36%
11.Dec. 18, 1931 …. 9.35%


8 of the top 11 days were during the Great Depression. Another was in 1987. The other two have been this month.


These kinds of increases are NOT the sign of a BULL MARKET..... but instead, usually indicate we're in the middle of a bad BEAR MARKET.

[Warpy]

1. Uh-huh

This economy, and with it a stable Dow, will not be healthy until the demand side of the equation is no longer being starved to death. It won't be healthy until we start exporting something besides war and debt.

It won't be healthy until we the people are healthy.

[yardwork]

13. We need to go back to producing things other than war and suffering.

We used to be known as the nation of Yankee ingenuity. What do we have to offer the world now? With our resources and long-time prosperity we should have led the world in developing and marketing alternative energies, for example.

For more than a hundred years the United States was the country that invented new technologies and sold them to the world. Now we don't even build our own televisions.

[dennis4868]

2. GREAT NEWS...

Wall Street now believes that Obama will win and everyone has confidence in the economy now.

[TheWatcher]

4. Based On What?

Thousands of hedge funds being on the Brink of Collapse? GM all but Bankrupt? Banks Hoarding Money instead of lending? Consumer Confidence Improving? Unemployment improving? Housing Recovering? Another Rate Cut that solves nothing? Mass Layoffs have ceased? The Credit Crisis is over in just 8 weeks?

What are people confident about?

[dennis4868]

11. of a Dem in the WH...

wall street always does better when there is a Dem in the WH...those are the facts...

[MercutioATC]

15. Sorry, no. This has nothing to do with the elections.

As the OP said, this is a spike in a heavy bear market. It's just delaying the run to the bottom.

[TheWatcher]

17. Care to address any of the issues I listed above?

Or do you just forego any understanding of economic principle and base all of your judgment on the, to put it diplomatically, thin premise listed in your post?

I know you'd rather feel good and have your perception managed so you don't have to think about reality, but today was not based on any fundamental reality of recovery. AT ALL.

[dysfunctional press]

16. ...

:eyes:

[seemslikeadream]

3. yes the beginning of the middle

[RobertSeattle]

5. Thanks daemons the DOWNER

:evilgrin:

[AllieB]

6. Today we had a "Suckers' Rally"

Suckers rallies happened frequently between 1929 and 1932, and, like you posted above, in 1987. History has shown that rate cuts are ineffective in bear markets also.

[DrDan]

7. well . . . not sure that is news to anyone

it hdid not take a 10% jump to let us in on the state of the market

[OmahaBlueDog]

8. I'll wager a good percentage of that gain sells back off in the next day or two

The market is just very volatile right now. Once the election is over and the damage on Xmas is tallied, I think you'll see some semblance of normalcy return. The next shoe to drop would appear to be that the "Big 3" automakers in the US will be reduced to two through merger.

[texastoast]

9. Yep,

My money says there will be another big profit-taking session.

[Selatius]

10. With really high volatility, these jumps and falls are to be expected.

This is nothing to be celebrating over but is just another symptom of extreme volatility. Most of the bargain hunters I saw the last three weeks got crushed if they were looking for a quick buck. Economic fundamentals are still pointing down.

[Canuckistanian]

12. I've heard this called "the dead cat bounce"

This crisis isn't over by a long shot.

[depakid]

14. What people need to be focusing on is the worldwide credit markets

Not volatility in the stock markets, which in the current environment amplify every piece of good or bad news beyond any rational meaning.

As credit eases and businesses begin to operate on "normal" assumptions, the effects of the global recession will become more predictable- and the stock and bond markets will stabilize.

[EmperorHasNoClothes]

18. We're in a bear market? No kidding!