Beware of the 900 Point Pop
October 28, 2008 by Tisa Silver
Filed under Finance
The Dow jumped 889 points today, the second largest increase ever…and I don’t want to sound like the soothsayer, but beware the 900 point pop.
I know the market has been hammered and I know that many are factoring in an expected 50 basis point cut tomorrow from the Fed, but this makes no sense. The Dow’s gain doubled during the last hour of trading.
Financials led the Dow higher while techs led Nasdaq’s 9.5 percent jump. Take a look at the price gainers list for each exchange: NYSE and Nasdaq.
Citigroup up 15 percent, AIG up 35 percent. Moves like this are too big and too irrational to be permanent. Looks like just another bout of speculators and bargain-hunters trading on sectors and not on individual stocks.
Et tu S&P 500! ;)
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Check out what others are saying about this post...[...] Traders were jumping for joy while I played the pessimist telling everyone to beware of the 900 point pop. Prior to the pop, I also said I thought we were nearing the [...]