Stock Market Gains
Last week’s doom and gloom in world stock markets was tempered by Monday’s astounding gains, the largest since the great depression. The Dow rose 11% the largest one day gain since 1933. It was the 5th largest percentage gain ever and followed a weekly 18% decline, the largest in the New York Stock Exchange’s history. The gains followed a weekend of meetings of central banks and the International Monetary Fund and the announcement of government plans to rescue banks through direct capital injections. Despite the doom and gloom the performance of the US dollar in currency markets continues to offer investors plenty of Forex opportunity.
Rally-Temporary or Not ?
Investors are debating whether the rally will be temporary or signal more stability in world markets. Market rallies have a mixed history. Of the five past one-day gains of 10% or more, two marked the end of bear markets, in 1987 and 1933. Three others, in 1929, 1931, and 1932, were followed by further declines in the market. Because of this mixed history it is difficult to predict what direction markets will take.
