I think we are near the end of a
bear market rally," said Gundlach, who referred a quote from another investment specialist, the late Richard Russell: "Bear market rallies look better than the real thing.
This could actually lead to a
bear market rally in MSCI China, whose valuation has been derated to seven times forward earnings.
The
bear market rally in crude oil/metals has led to capital flows to bombed out Toronto/Vancouver equities.
If prices are dropping, the run would be referred to as a
bear market rally.
And Profit Confidential turned bullish on stocks in March of 2009 and rode the
bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
These signals are based on the intrinsic behaviour characteristics of equity markets: upward trends are usually accompanied by lower volatility (except in
bear market rally situations) while bear markets experience higher volatility.
Rosenberg said he sees "a
bear market rally as opposed to the onset of a new secular bull market" and urges investors to stay cautious.
There is a risk that this is a
bear market rally and the situation could reverse when such liquidity leave the cities or country, or there is new shock to the economies," explained LaSalle Investment Management's Asia-Pacific head of research and strategy Kenneth Tsang.
Given that current conditions clearly qualify as a bear market under this definition, we can only assume that we are in the midst of a strong
bear market rally.
Polled following Bolton's comments, three-quarters (75%) put the surge in equities down to a
bear market rally.
Everyone is asking, is this a
bear market rally, where investors just buy shares as they look very cheap relative to earlier highs, or is it a genuine and sustainable recovery in the stock market based on sound fundamentals?
There has been other good news with most financial markets starting to showsome signs of recovery, although many people are sraying that this is not a real recovery but just a
bear market rally before markets start to go down again.
