Market Update - August 18, 2009
Just back in from a great end of summer vacation/baseball tourney in Maui....summer is over for the Herriage household and it's back to school today. During a layover yesterday I noticed that the market was getting hammered. Then, when I ran my research this morning Isaw that it was not only a 180 point down day, but that it happened on 90/10 down to up volume.This big rebound needs a breather--small caps jumped 67% from the 343 close on the Russell-2000 on March 9th....all without a 10% correction along the way.
If you go back in history and chart recoveries out of recessions you will NOT find a single 50% rebound off a recession low in only five months except for the bear market rally in 1930, which was eventually erased with an further 82% drop in 1932.
Since 1950 the average length of time to achieve a 50% rebound is 18 months BUT those figures were only produced with real GDP growth of +4.5% from the bottom, an average of 850,000 jobs added to the economy, corporate profits jumping by more than 12% and bank lending increasing by more than 5%. None of those events has occurred in this rebound.
For the full article, visit http://www.kipherriage.com/.
To Your Success,
Your Wealth Masters International Team
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