Dow Back to January Levels
As I speculated at the beginning of the year, this year will likely be quite tough whether you are a bull or a bear. The market action so far this year has stayed true to those words.
On the bullish side is the historical tendency of the stock market to post really large gains after a massive crash. Since 2008 was one of the worst yearly returns in history—if I'm not mistaken, the 2nd worst—it seems probable that the market will post a strongly positive return this year. This is what has happened in some past periods, including 1933, 1967, 1975, and 2003.
Conversely, the bears are likely licking their paws given how many of the financial and economic problems are still lurking, and valuations are nowhere near major bear market troughs.
I read some trading blogs once in a while and I wonder how many of the commentators of those blogs actually made money this year. Unlike last year when shorting everything made you look like a genius, the year hasn't been kind to the bears. Conversely, anyone who bought anything (the junkier the better) in the last few months look like a genius but it remains to be seen what unfolds as we move forward. Tags: commentary