财经观察 1595 --- 8th Bear Market Rally Since October 2007

Jay Leno Jokes

1. The US has made a new weapon that destroys people but keeps the building standing. Its called the stock market - Jay Leno

2. Do you have any idea how cheap stocks are ?? Wall Street is now being called Wal Mart Street - Jay Leno

3. What's the difference between a guy who lost everything in Las Vegas and an investment banker?      A tie!

4. Bush was asked about the credit crunch. He said it was his favourite candy bar - Jay Leno

5. President Bush's response was to meet some small business owners in San Antonio last week. The small business owners are General Motors, General Electric and Century 21 - Jay Leno

6. What worries me most about the credit crunch, is that if one of my cheques is returned stamped 'insufficient funds'.  I  won't know whether
that refers to mine or the bank's 



8th Bear Market Rally Since October 2007

Merrill Lynch’s David Rosenberg notes that last week’s pop was the eighth bear market rally since October 2007.

As the chart below shows, they have ranged in strength from ~8% to over 24%.

Each one was treated (”enthusiastically”) as if a bottom had been made. Each one saw a subsequent lower low, excepting the most recent one that ended Friday.

These included:

1. The TAF (S&P 500 at 1500)
2. January 75 bp rate cut (1325)
3. The Bear Stearns deal in March (1270)
4. The fiscal package in April (1200)
5. The GSE conservatory in July (1200)
6. The TARP in October (1180)
7. Pre-election Rally (840)
8. The Citi bailout in November (750)

Rosenberg added late Sunday:

This is now a five-day rally that has seen the S&P 500 surge 19%. Then again, we did see a 7-day rally tally up to 18.5% from late October to early November. And before that a 4-day rally in mid-October that netted equity traders an 8.5% spike. What is happening is that the bear market rallies are getting shorter and more flashy – but they are still bear market rallies. The ones we have seen thus far in this bear market have seen the S&P 500 rise nearly 10% and last 18 days on average. These are rallies, in our opinion, that investors should using as an opportunity to sell into.

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Bear Market Rallies, October 2007 to November 2008

chart courtesy of FusionIQ, Bloomberg