BEAR MARKET RALLIES

Weekend Commentary

YOU SHOULD keep in mind that recovery rallies that occur during extended bear markets are often very impressive. If the rallies were just run of the mill they would not do their job. These rallies will last just long enough to lure in the most that think the worst is over and they let their guard down.

And when these rallies fizzle, and those that jumped back in deny their is trouble brewing in the air, that's when the PRIMARY BEAR TREND reasserts itself with a vengence.

Folks this is a nasty Bear MArket, values will most likely be driven down to never before seen values, with yields near 6%, and SPX 500 PE ratios in single digits......I am sorry to say I do not think we have gotten to the end, and I know the yields and PE's have not met their goals.

The avg person is not trading these markets, the avg person may be reading my blog along with some seasoned traders, but the avg person has been holding this whole time.

The feverish demand for stocks usually met at bear bottoms has been mostly absent here. I think the rally from MArch is most like the one after the 911 panic subsided. I mean WHAT could be worse than the terrorism and pain we felt after being attacked?

I dont remember, but I do know that rally ended and new LOWER prices came after in OCT 2002. And then again in 2003 we came close to the lows, TESTED and didnt look back.

IMHO at LEAST the lows get tested my friends....at the least.

Our problems are deep and wide. Long TERM int rates manipulated lower, even with threat the FED buys its own Bonds...have only risen since....10 yr back above 3.10 % which means mortgage rates will rise......not what was intended....but we KEEP BORROWING TRILLIONS.......there is no spending control iN GOV....

You ask yourself.....or anyone....how ya doing...is it getting better....are the programs taking hold...fixing the problems?

This is the WORST economy in my 50 yr lifetime.....so I wont presume to know how it ends, or improves....I can say I dont see it yet.....and its PRESERVATION MODE for me

D