Tuesday, November 01, 2011

Looks Like a Sucker Rally

According to Investopedia, "a sucker rally occurs with little fundamental information to back the movement in price."  To me the definition seems to apply to the October 2011 rally, one of the best ever.   I couldn't figure out what had changed from September 2011.  The U.S. economy was still poor.  The situation in Europe still looked bad.  The catalysts for the rally were the beliefs that the Greek debt crisis would be resolved and the U.S. would not have a double dip recession. 

Today, the Greek debt crisis is back.  With a Greek default looming, a double dip recession in the U.S.  has become a concern again.  Unfortunately, nothing has changed and the stock market will likely fall back to previous levels.
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