The Dow Jones Industrial Average closed up nearly 1,000 points (well, 936.42 or 11.08%) to close within sight of 10,000 again after its largest daily point gain ever. The S&P 500 soared 11.6%, the Nasdaq Composite Index rose 11.8% and the Russell 2000 jumped 9.2%. Who said that last week's dips were a buying opportunity? I won't make you guess; it was me.
But don't get too excited. As the Wall Street Journal reports today:
Despite Monday's massive rally, many Wall Street veterans remain on the lookout for a grinding period of weakness in the global economy and stocks in the months ahead.
"The danger here is that people will be lulled into the idea that a strong bull trend is now in place rather than the idea that the market is just bouncing off a short-term oversold condition," said Michael Darda, chief economist at MKM Partners, a trading and research firm in Greenwich, Con.
They continue:
Doreen Mogavero, president and chief executive of the New York floor brokerage Mogavero Lee & Co., said she's still looking for a round of capitulation, or last-ditch selling to pave the way for a more sustained rally. While there were some hopes that Friday's intraday market low, including a nearly 700-point decline for the Dow, would mark such an event, she believes there wasn't enough volume behind the selling to confirm it as a true capitulation.
"At best, I think we're looking at a short-term bottom here," she said.
So basically, if you're one of those who couldn't stand the heat last week and jumped out of the frying pan, you may have really ended up in the fire after today's up-surge. But only time will tell where the real bottom is and when the real recovery will happen.
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