Stocks are ending the week on a sour note after experiencing a three-day rally mid-week that saw the three major indexes gain upwards of +13%. But was this a bear market rally? Or can the upward momentum continue?
What is a bear market rally, you ask? A bear market rally is a sharp short-term increase over days to weeks within a longer-term bear market. Often investors will see this short rally and think that a bottom has been put in and that the bear market is over. However, investors should be cautious as the downward market action will often return, catching investors out.
You may know these rallies by other names such as a "Sucker Rally" or a "Dead Cat Bounce."
The bear market rallies that began in 2000 and 2007 both gained more than 20% before coming to an end. The most massive bear market rally came Continue reading "Was This A Bear Market Rally?"