This is one of the craziest markets, I have seen since 2008. It kind of reminds me of September 2008 market action, when the market declined for several days and then suddenly jumped up for two days, taking back all the losses. However, this rally was just a bear market rally and what followed was the sudden market crash (late September and early October).
It is so strange that back in 2008 everyone was talking about the financial problems and the government was trying to take action. However, now the European governments are just sitting tight and letting the market decide their fate. Under such circumstances, Central Banks’ intervention is even more dangerous: Central Banks’ know the gravity of the problem, while the investors and governments stay indifferent to it.
So where does it leave us?
First of all, we were in a Bull market from April 2009 to July 2011 (according to UST Bull/Bear filter). But we never saw a 490 point rally during this period. Why?? Does this mean that markets do not rally this hard in Bull markets? However, we did see several 500+ point rallies during the 2008 bear market. There must be some pattern!!!
Full market analysis has been sent via e-mail...