Bear or Bull?

The main news item this morning was the official jobs report for March. There were 633,000 jobs lost raising the unemployment rate to 8.5%. This was a little better than expected but a non event for the stock market.

Economic numbers continue to show us that we are in a slump. However, those numbers, while weak, are revealing a slowing in the economic fall. That alone has sparked a rally. This rally is a Bear market rally. Usually a 20% move from a bottom is considered a change to a Bull market. That is what we have seen. It is hard to feel all that comfortable because we had a 25% collapse in the market the first two months of the year and in the beginning of March it continued to fall until the third week. Then we had almost three weeks of an up market producing a ‘V’ bottom. Technically we are in a Bull market.

You can not fight the tape. The market is rallying. That is a fact and you have to ride it as far as it will go. Stock prices are still very low for those companies that have earnings.

Fear is subsiding. That is a good thing; therefore maybe this bull rally has further to go.

Good Trading
Steve Peasley

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