What Today's Bounce (11/13) Means

[Car Insurance Guy]

The market is crazy these days. 500 point swings in the Dow are almost becoming a daily occurrence. Such was the case today. Hopefully not many on this forum are day trading the emini's or buying double-inverse ETFs for fun. But it's still interesting.

We tested October's lows and almost immediately bounced back - all the while Bush spoke to the G20 Summit in NYC. If this one holds we'll have a triple bottom in place.

How do you all interpret the bounce today? Was it short covering, optimistic longs, or something more conspiratorial? And will it hold?

[kork13]

Performance like this has been cyclic for weeks. Crash, jump, crash, jump, steady, crash, jump, steady, ... and so on. There is not enough confidence in the markets for these gains to stick. However, we're not desperately floundering either, so I see continued fluctuations very similar to this for at least the nearly foreseeable future. When a 'bottom' actually will come? No idea. However, I think there needs to be alot more confidence in the markets and our industries before it will happen.

[disneysteve]

I don't think it means anything and I think all the talking heads who try to make it seem like they know what the heck they are talking about and think they can actually explain these fluctuations are looking more and more foolish with each passing day.

[Car Insurance Guy]

Steve - before I started following this stuff, I thought all the business broadcasters knew exactly what they were talking about.

"There was short-covering on the market today......Investors took profits.....the rally happened because employment data....etc. ad infinitum

Now their conclusions bring a smile to my face. The market could go up because of good employment numbers, but it could go down just as easily if the same data is released. The whole market is a complicated mess. I'm beginning to doubt anyone who says they understand it.

[disneysteve]

I'm beginning to doubt anyone who says they understand it.

What convinced me of this fact was that earlier in the year, stocks were moving down and they blamed it on rising oil prices and the strain that put on personal and corporate expenses. Then, oil prices started dropping and stocks dropped even more. Then they blamed it on falling profits for the energy sector. In other words - oil price goes up, stocks go down; oil price goes down, stocks go down. That's when I realized that most of what they say is probably nonsense. It sounds good. It sounds vaguely logical most of the time. But what happens day to day is virtually impossible to explain. Long-term trends are different, but day to day or hour to hour fluctuations involve far too many variables to possibly pinpoint cause and effect.