Stock Market Rally Continues For 5 Out Of 6 Days

The market has continued to rally for the past five out of 6 days (it took a break on Monday). Yippie! [WSJ]

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  1. discordance says:

    Don’t you know?

    When the stock market is down it’s ‘an inevitable showing of market volatility and lack of consumer confidence in the global market place’ but when the stock market is up, even for several days, it’s ‘an obvious aberrant statistical situation that will undoubtedly be corrected with another sharp downswing in the short-term.’

  2. JeromeMabawza says:

    Except for Monday when it didn’t.

  3. Your friends can call ou HoJu! says:

    Hang on tight, everybody. This next drop is gonna hurt!

  4. BeerManMike says:

    Heres a math lesson kids: Johny has $10,000 in the stock market, the stock falls and johnny loses $8,000 then the stock market gains and jonny earns $1,000. How much money did johnny make?

    • Citizen Kang says:

      @BeerManMike:

      The answer is Johnny didn’t “lose” anything until such time as he decides to liquidate his assets. Until that time any “loss” is on paper and has no bearing on his cash in hand.

    • humphrmi says:

      @BeerManMike: What if Johnny (A) didn’t sell when the stock fell in value, and has no plans to sell now? What if, when the stock lost 80% of it’s value, Johnny doubled down and invested another $2,000 in the stock? Then his cost average is about half.

      • Con Seannery wants the azure F back! says:

        @humphrmi: What if, when the values floored, Johnny kept his head and hung in there, or maybe bailed and jumped back in when it dropped more or started to climb so as to try and play the market?

    • dwhuntley says:

      @BeerManMike: The answer is negative one trillion dollars, since Johnny and his children’s children now owe Uncle Sam for saving the company Johnny bought stock in.

    • Sure I could agree with you, but then we'd BOTH be wrong. says:

      @BeerManMike:

      >Heres a math lesson kids: Johny has $10,000 in the stock market, the stock falls and johnny loses $8,000 then the stock market gains and jonny earns $1,000. How much money did johnny make?

      JOHNY didn’t lose anything – apparently he has $10,000 int he stock market.

      JOHNNY seems to have lost $8,000 but we don’t know how much he had invested.

      JONNY seems to have earned $1,000 but we don’t know how much he had invested.

      Assuming that Johny, Johnny, and Jonny are three different people.

  5. ecwis says:

    What’s typical is about a loss of 40-50%. And Johnny could’ve gotten his money back if he put it all in Citigroup on Monday morning…

    Just saying…

  6. B says:

    @beerman: Johnny lost 8K. Jonny made 1K. Was it a trick question?

  7. HawkWolf says:

    @everyone talking about losing and gaining, isn’t putting your money in the stock market an instant ‘loss’? I mean it stops being your money and starts being ‘over there’. It’s not yours until you sell the stock and get it back. If you actually want ‘money’ you need cash. I don’t really think that everyday people should be screwing around in the stock market that much. You need CASH if you’re not enormously wealthy. You need cash to live in this world. You don’t need your money magically tied up in things that could suddenly drop in value within a week. I’m sure someone will tell me that cash will suddenly drop in value within a week, but I find that hard to believe. If we reach that point, we’re going to be zimbabwe or we’re going to be in the middle of a civil war over it and you might have bigger fish to fry.

    • Garbanzo says:

      @HawkWolf: No, putting your money in the stock market is an investment, not an instant loss. Your are correct that you should not keep your emergency funds, or funds that you will need in the near future, in the stock market. In fact, even the enormously wealthy need, um, liquid funds (not clear from your post whether by “CASH” you mean bills and coins, or just liquid balances such as a checking account).

      Your implication that only the “enormously wealthy” need investments, however, is false. While genuinely poor people will need all their money to survive and won’t be able to save/invest, I’d say anyone making perhaps half of median income or higher should be investing for retirement and other long-term goals (buying a house, educating children). I’m not sure if the cut-off is half of median income (maybe it’s 2/3, maybe it is median), but: if you have enough money to pay for rent, utilities, taxes, necessary transportation to get to work, medical care, modest clothing/personal care, and food to cook at home, then you should be investing to build up a nest egg. Note that I have said nothing about taking vacations, eating in restaurants, buying fancy cars and electronics, buying a lot of clothes, or having cable television. If you can’t afford to purchase these luxuries and also invest, oh, at least 10% of your income then you shouldn’t be purchasing those luxuries.

      Historically the stock market has been an excellent vehicle for long-term investment, and not just for the “enormously wealthy”. My grandfather, a steel worker who raised 7 children, funded a long and comfortable retirement partly through stock investments. My parents, also not enormously wealthy (my mom worked as a receptionist in a doctor’s office), are retired and also, yup, partly living off of savings they invested in the stock market.

      You’re focusing on the risk of loss of capital, which certainly happens in the short term. However, I think you’re blind to the risk posed by inflation, which will erode your purchasing power if you keep all of your savings in highly liquid form such as checking and savings accounts, or CASH in your house.

      Investing in the stock market doesn’t have to mean buying and selling individual stocks. It could mean sending $50 each paycheck to a mutual fund tied to the S&P 500.

  8. tailstoo says:

    If Johnny only lost 10%, he’s doing much better than most of us!

  9. lancepeeples says:

    A better barometer of the economy than the stock market is employment. Is the economy still shedding jobs? Is the rate of job loss accelerating or not? When is job growth likely to occur.

    • bonzombiekitty says:

      @Lance Peeples: Depending on the way you want to view it, one can influence the other. People start investing in the market, which adds cash to the system, which means companies can hire employees. Or companies start hiring employees and the market sees it as a good sign and start investing again.@boricuachick: Well, hopefully you don’t plan on retiring for at least another 5 years. If you do, then you should have had the money you plan on using within the next 5 years in safe investments like bonds.

  10. boricuachick says:

    My 401k lost 50% of its value. If we can keep pasting together 5 days or 6 days of rallying for about the next 3 yrs. I should make that money right back…..(roll eyes).

  11. dohtem says:

    Who is Johnny and where did he get all this money from?!

  12. minsky says:

    Repeat after me…the stock market is NOT the economy.

    the stock market is NOT the economy.

    Got it? Okay!

  13. Trai_Dep says:

    Hey, kids. Let’s get together and meet Johnny at the back of school. I hear the kid has a LOT of lunch money jingling in his pants pockets…

  14. bossco says:

    Remember, the Stock Market is just legalized gambling. You buy low and sell high. The trick is to know when.

  15. Anisha says:

    A lot of people think this fall is because the housing market is way over-valued, and i have to agree with them. Homes that are worth 200k are selling for 600k, so when the market hits bottom, these people will have to take huge losses on there homes.

  16. wgrune says:

    I think we should treat this like a perfect game into the 8th inning of a baseball game: don’t talk about it until after the 9th inning is over. DON’T JINX IT!

  17. NotChoinski says:

    This is just the market’s way ofg having make-up sex. It rises 1000 points so it has room to plummet hundreds more during the mext kerfuffle.

  18. Erika Price says:

    We’re WINNIN’ THE WAR!

    Of course, the above commenters are right. Unemployment is an important metric in itself. But some of my friends who were laid off a few weeks ago have recently been brought back for part-time positions and the like. Is a good sign of improvement, I wonder, or did the company just release too many people at first?

  19. DoctorMD says:

    Mmm, worthless digital data that have as much in common with their companies as a baseball card to its corresponding player.

    Here is a good one adjust for CPI (inflation) and the stock market was back to 1965 last week. So much for profits. And that not counting they throw the losers out of the Dow.

  20. bitcherella says:

    Dead cat bounce.

    Stock rallies in a recession do not bode well.