Bear Market Bounce?


The concern is that this bear rally is just around optimism and wishful thinking rather than reality. Also, the blogs are full of worries that no one will invest in the public market ever again.
In the long overview of public markets, there is a small window where they make a strong profit before they do self correct.
There are cycles.
Private equity investors are also impacted as the market affects their company revenues too. We are all connected in this complex financial system.
Technically, it is yet too early to call out a bottom formation since the intermediate trendline is still downward sloping and must be broken to move higher. Until we see a clear reversal of this trend, the charts suggest a bear market rally that needs additional momentum to break the bearish trendline and form a true reversal. A break above 850 on the S&P500 and a subsequent re-attempt of the previous double top around 877 should give impetus to such a trend reversal.
In the meantime, call a client and keep moving forward.


2 comments:

Anonymous said...

Not that I'm leading a stampede but I'm out of public markets - not physically, not yet, but will be. Early in my career I took advantage of company stock plans and pension plans, RRSPs, etc. When I moved into nCompass I put some of my own money into private firms - once I can regain some traction in my 'public' portfolio I'll be tranfering the funds into PE funds.
The behaviour of large company C-level types and the amount of influence opinion and rumor has on stock prices isn't for me.

Michael

Anonymous said...

Our investments in private companies is surviving admidst this carnage but I wish I could say the same for my public market investments. And you are right about emotions affecting the price.