Don’t Be Fooled by Rallies: Rough Road Ahead for Stocks – Jeff Cox
To those roiled by the wild stock swings over the past several weeks, the market is sending a clear message: Strap in, it’s going to be a bumpy ride.
While the good news is that the market has recovered most if not all the losses it suffered at the early part of last week, the bad news is this is how bear markets behave—with wild swings and counterintuitive behavior that makes forecasting near-term moves a messy endeavor.
“It’s really a waiting game and a push-me pull-you between the bears and the bulls where you’re going to have up 100-down 100, up 200-down 200 days until this stuff is resolved,” said Michael Cohn, chief market strategist at Global Arena Investment Management in New York. “We’re definitely in a recession of confidence, and that’s what it’s all about—confidence.”
The market is currently on a five-day streak of 100-plus up or down days—likely headed for a sixth on Monday—on the Dow Jones industrials as investors weigh a worsening economy, a US debt downgrade from Standard & Poor’s and an unprecedented move from the Federal Reserve [cnbc explains] to keep interest rates near zero for at least the next two years…
Read More at CNBC.