Rebounding From The Lows

Yesterday, the markets repeated the behavior of the past few months which, a couple of days ago, I referred to as “back to normal.”

After a sharp sell off at the opening, the bulls stepped in and slowly but surely pulled the major indexes out of the doldrums and, for a short period, into positive territory. The gains did not hold, but the losses were minor compared to what could have been.

It was a volatile day to close out a quarter, which featured the S&P; 500 gaining 15%, its best quarterly performance since the end of 1998. Despite this impressive run, there is still a lot of making up to be done to overcome last year’s disaster when the markets collapsed and the S&P; 500 ended up losing 17% just in October 2008.

From current prices, the S&P; 500 still needs to gain another 19.8% just to get to the level we sold at on 6/23/08. Whether we will get there remains to be seen, but at least we made it through September with flying colors.

Of course, now we have October in front of us, a month which has also been known to wreak havoc with the markets. There is no need to become complacent; keep an eye on your trailing stop loss points, and be ready to act should this trend suddenly come to an end.

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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