Wednesday, 11 March 2009

Market Rally Staging

Australian Stock Market Charts - NetQuote
There's a new (bear) market rally going. In the past couple of days there have been predictions of one. Mr.Roubini said there is a large bear market (suckers) rally coming that might extend over several months. The stimulus packages are bound to lift the market up, although artificially. There is a lot of cash on the sides. Cash rates are closing on zero worldwide and that makes cash owners uneasy. Markets are at a depressed state and there are different views on the bottom of the current markets. Whichever way we look at, the worst predictions are that we are about a 25% away from the bottom. The more optimistic views have been all beaten recently, of course.
It is possible that markets are bound to go up from this point. There is a lot of talk about the future of the financial markets worldwide and that will really decide on whether there are conditions for the real growth to come from. Enormous amounts of government debt created recently plus enormous amounts of corporate and private debt that has to be cleared soon still pose a huge question mark on the real economic recovery.
Well, it is very hard to distinguish between the "noise" - the news that just state the obvious - and the ones that are actually saying something about the future.
If you're market superstitious - this is March, the month in which a huge turnarounds happen. So, let's wait and see.
I save/invest in small bits and pieces, as described in my investment tips for the bear market.

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