Mother of All Sucker Rallies Sends Dow 1,000 Points Higher

Following a brutal four days in a brutal month, stocks staged a massive rally. Alas, it won't last.

The Wall Street Journal reports Dow Industrials Leap More Than 1,000 Points.

The Dow Jones Industrial Average surged more than 1,000 points for the first time in a single session Wednesday, rebounding after a bruising four-session selloff put the blue-chip index and the S&P 500 on the brink of a bear market.

All 30 stocks in the Dow industrials notched gains, as did each of the 11 sectors in the broader S&P. Shares of Amazon.com , Facebook and Netflix climbed more than 8%, while retailers rallied as early data on the crucial holiday shopping season appeared robust. And a nearly 9% rise in oil prices offered a respite for shares of beaten-down energy companies.

Verge of Bear Market?

The WSJ says the S&P 500 was "on the verge of a bear market".

I disagree. I claim the S&P 500 is in a bear market.

Who's right?

Arguably, we both are. It depends on where you measure from.

The high of 2940.91 as shown in the above chart was an intraday high. The high the previous day was 2930.75. That was also the highest close ever. On a close-to-close basis the S&P only fell 19.78%

Is the WSJ ridiculously splitting hairs? Yes.

About Bear Market Rallies

Today was a typical bear market rally. I posted some charts on December 24: S&P 500 Slips into Bear Territory on Worst Christmas Eve Trading Ever

Yes Virginia, it's a bear market. Expect a lot more days like today, with everyone caught believing "the bottom is in", every step of the way.

The next real bottom will not be in until everyone is totally disgusted with the stocks and gives up. Demographically-speaking it will come at the worst time for boomers.

There was one and only one thing surprising about today: Trump did not yap about it.

Mike "Mish" Shedlock

Comments
No. 1-6
shred1
shred1

Its a good time to buy! (but I'm moving to South America)

stillCJ
stillCJ

Editor

Dec. 27, 4;10 pm est: The "sucker rally" continues, but the shorts did have an opportunity to cover today.

Sechel
Sechel

I don't follow the market in the same way I used to so volume indicators don't jump out at me but low volume was reported which will exacerbate any move.

JG1170
JG1170

It certainly looks like a major sucker's rally. 2019 is still looking like it's going to be a rough year for stocks.

channelstuffing
channelstuffing

We all know what time it is,central banks and their printing presses using shock n awe toward blow out top.6000 pt rally in 4 days to new years day all time high.Can't fight the print press (ever)