Stock Market Rallies After 5 Consecutive Losing Days

It was a surprising day with the stock markets and we saw an unpredictable rally. There was around a 2% increase in all the major indexes. This was in line with the US President’s $75 billion foreclosure prevention plan.

We saw Wall Street increase from 6600 to 6834, which was an increase 234 pips. The S&P 500 also increased by 20 pips from 688.38 to 708.38. We also saw a rise in the FTSE 100 from 3513 to 3624, which is an increase of 111 pips.

This was an extremely unpredictable rally, and from yesterdays post I had actually expected to markets to continue their downward trend. The long term view is still bearish, the stock markets in my opinion will continue to fall, as there is no real confidence in the economy, and I feel there is no real good news around the corner to come.

Today was unexpected, and it was a big surprise to see the markets rallying. The rally was in line with the release of the housing relief plan from the US Treasury Department. This plan is meant to help up to 9 million people who have borrowed money to stay in their housing accommodations by refinancing existing mortgages and loans which will lead to lower monthly payments.

I don’t think this rally will last long and I think it will be a testing few days where investors want to see if this rally has some real reason behind it. It is very hard to predict whether we will see the markets continuing to rally tomorrow or whether they will continue their long downward trend. Investors seem to be wary of the gains in the overseas markets and I don’t think there is a lot of confidence in the markets overall at all.

Either way, I am sure tomorrow will be another unexpected day!

Kind Regards

Robert Stewart