Stock-Markets
Diamond Rated - Best Financial Markets Analysis ArticleThe $17 billion hostile bid for Cadbury 'should' bring home the inherent underlying actual strength of this bull market as the bid signals that business is returning to normal. Today's bid by Kraft Foods sent the Cadbury stock price soaring by more than 38% and clearly illustrates that multinationals are increasingly awakening from credit crisis fear to taste greed at being able to pick up corporate giants such as Cadbury at rock bottom recession prices even after a 38% one day price hike. Watch this space for many more mega bids to come as the bull market momentum continues to gather steam as we have a long, long way to go before we reach the Merger and Acquisition mania levels associated with BULL market Peaks.Meanwhile bull market deniers in the face of overwhelming evidence of a bottom i.e. as evidenced by the price trend continue to cling on to literally anything that leaves the door ajar towards revisiting the March lows and below. Even resorting to delving back into the midst of time to the 1930's for any glimmer of hope. It should be obvious by now to everyone that transposing current price action onto a graph of the 1930's bear market makes it rather obvious that THAT is NOT going to happen?
One of my fundamental rules of analysis is that the further one deviates from the present the more probable that one is going to be wrong, and the 1930's is more than just a deviation, at most I would go back perhaps a year to look for relative strength and weakness. But nearly 90 years? That era is long gone and buried and bears NO significance to the PRESENT! Yes we have echo's through time, but NOT THAT FAR BACK ! For actual market impact events on to today's markets one needs to look at the peak in the housing markets and credit crisis events of the past 2 years where the three most notable events were -
a. The Lehman's sparked Financial collapse of Sept / October 2008
b. Zero Interest rates.
c. the implementation of Quantitative Easing.
They are the most important echo's from the recent past impacting on the present, rather than trying to match a chart from the 1930's to the present.
Is this a Bull Market or a Bear Market Rally?
My point of view is simple (it is good to keep it simple)- Pick up any reputable technical analysis book and you will read that that a bull market in stocks is confirmed when an major stock indices (that's the DJIA) rallies by 20% from the low (allowing for a few days of whipsaw), similarly a bear market is confirmed when an stock indices falls by 20% from the high , therefore regardless of perma views of this being a bear market rally, the facts are clear that under the basis of technical analysis this rally has long since been confirmed as a bull market more than 30% ago!
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