Several things conspired for this bounce | stockbee

11/25/2008

Several things conspired for this bounce

  • Markets built on their gains from Friday. These kind of spectacular rallies are key feature of bear markets. The volume was low and the Market Monitor 4% breakout ratio is 852/95, that is very low for such a big bounce.
  • Several things conspired to make this opportune time for the bounce:
    • A big screw up at Citi followed by weekend rescue.
    • Extreme breadth readings on Market monitor from which market reliably rallies.
    • Holiday shortened week.
    • Signs of leadership. Finally Barack Obama emerged out of the rock he was hiding under since his election and the market tanked.
    • A hints of massive 700 billion plus rescue stimulus package.
  • In addition last night news emerged that government would create abank to finance hundreds of billions of dollars in commercial debt, like car loans, student loans and business leases.

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