Skip to search.

Bear Days of August Might be Over, Says Barry Ritholtz

Posted Sep 02, 2010 12:23pm EDT by Stacy Curtin in Investing, Recession

Markets took off yesterday shortly after the morning bell, as positive manufacturing reports for the U.S. and China bolstered investor confidence. The ISM Index found U.S. manufacturing grew in August to 56.6, up from 55.5 the previous month. The rally left the Nasdaq, S&P and Dow all up about 3% at the end of the trading day.

But is the rally here to stay, or is this just a bear market blip?

Barry Ritholtz of Fusion IQ and writer of The Big Picture blog, is taking it slow and just "legging in" to test the waters. He says that we are in a range market right now, and that the "key support" is 1040 on the S&P 500.

"We've traded down to that a dozen times, and you see on the chart that every time you hit that, we've bounced off of it." His forecast is that we will be trapped in this range for the "foreseeable future."

Using history as a guide, Ritholtz says stocks generally correct 20-30%, after a massive rally, like 2009's 82% rebound.  So far, we're not there yet.  Plus, it's his view we're still in a secular bear market which could last another four to six years.

That's not to say we can't have another bear market rally. Ritholtz hopes that the down days of August are over and tells Henry in this clip, "People think of September as the dangerous month, but when you have a real bad August, maybe it anticipates it and washes it out of the system."

One can only hope! Tell us what you think!

___

Follow Yahoo! Finance on Twitter; become a fan on Facebook.

121 comments

  • 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
    Jonhson Mon Sep 06, 2010 10:26 am EDT Report Abuse
    Give us a chance Government.

    Sales Tax
    Hotel Tax
    School Tax
    Liquor Tax
    Luxury Tax
    Excise Taxes
    Property Tax
    Cigarette Tax
    Medicare Tax
    Inventory Tax
    Car Rental Tax
    Real Estate Tax
    Well Permit Tax
    Fuel Permit Tax
    Inheritance Tax
    Road Usage Tax
    CDL license Tax
    Dog License Tax
    State Income Tax
    Food License Tax
    Vehicle Sales Tax
    Gross Receipts Tax
    Social Security Tax
    Service Charge Tax
    Fishing License Tax
    Federal Income Tax
    Building Permit Tax
    IRS Interest Charges
    Hunting License Tax
    Marriage License Tax
    Corporate Income Tax
    Personal Property Tax
    Accounts Receivable Tax
    Recreational Vehicle Tax
    Workers Compensation Tax
    Watercraft Registration Tax
    Telephone Usage Charge Tax
    Telephone Federal Excise Tax
    Telephone State and Local Tax
    IRS Penalties (tax on top of tax)
    State Unemployment Tax (SUTA)
    Federal Unemployment Tax (FUTA)
    Telephone Minimum Usage Surcharge Tax
    Telephone Federal Universal Service FeeTax
    Gasoline Tax (currently 44.75 cents per gallon)
    Utility Taxes Vehicle License Registration Tax
    Telephone Recurring and Nonrecurring Charges Tax
    Capital Gains Tax
    Ticket Tax, you know the one you go to court for not using turn signals Ect...
    STILL THINK THIS IS FUNNY?
    Not one of these taxes existed 100 years ago, & our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids. We also were A Common Law Country!

    I have set up a place that the poor and middle class in the country can start to get some of this tax money back. It is our turn to have a piece of the action.

    Here is my way to get your loot back.

    Just googl THE ```CASH`''`TEACHER and proceed to 1st site. To find the ways to cash in, go to the PENNY STOCK section.
  • A Yahoo! User
    0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
    A Yahoo! User Mon Sep 06, 2010 12:57 am EDT Report Abuse
    Can you say poker face?
  • A Yahoo! User
    1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 1 users disliked this comment
    A Yahoo! User Sun Sep 05, 2010 10:54 pm EDT Report Abuse
    Please read the comment I wrote last Thursday telling peeps to buy. They covered me in pygmy spittle but it's all good. He who laughs last. I'm whistling a merry tune today : dingdong, the witch is dead. Where have all the doomers and dipsters gone? Just two weeks ago Gerald Celente, the grand Dragon of Doomers, was announcing the greatest of all depressions- riots, und so weiter. Peeps have forgotten how we got here from 11300. Doomers preaching the fall of the EU. Indicators now are more encouraging than when the Dow was 11300. Then why doesn't it go back? It will, and so fast it will make your head spin. Blue skies smiling on me. Nothing but blue skies do I see.
    Russ Stahl, the Supreme Leader
  • 2 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 1 users disliked this comment
    Richard Sun Sep 05, 2010 03:25 pm EDT Report Abuse
    Bear market is behind us and a fresh Bull will emerge! But this Bull will be soon slaughtered and made into hamburger for the masses with the steaks going to feed the sharks on wall street. The ebbs and flows are manipulated and created. These are not moral and honest people at wall street....remember Ivan Bosky, Michael Milken, Bernie Madoff, Carl Ichan , Marc Rich, Pinkus Green, Irv the liqudator Jacobs, Sir James Goldsmith
  • A Yahoo! User
    1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 1 users disliked this comment
    A Yahoo! User Sat Sep 04, 2010 12:01 pm EDT Report Abuse
    He does not know what he is talking about or he does and is not saying. The market will FALL and fall fast very soon. Cash or Short only
  • A Yahoo! User
    0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
    A Yahoo! User Fri Sep 03, 2010 11:33 am EDT Report Abuse
    Newton's Third Law: "Actioni contrariam semper et æqualem esse reactionem: sive corporum duorum actiones in se mutuo semper esse æquales et in partes contrarias dirigi."

    Or, in terms our Wall Street friends might better understand, "nothing's free".
  • A Yahoo! User
    1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 1 users disliked this comment
    A Yahoo! User Fri Sep 03, 2010 11:23 am EDT Report Abuse
    But mostly I'm amazed at the capacity the "smarter than you" crowd has for declaring themselves just that, smarter than everyone else. All while they depend on everyone else to insure their own wild behavior.

    As "the markets" recover, the Wall Street crowd, like Ritholtz, are taking a victory lap in their new Maseratis and passing out $million bonuses while the rest of us out here in flyover country are trading $80k/year careers for $10/hr and just trying to hang on.

    I remember turning on the TV at work and watching the WTC fall in 2001. I happened to be "all cash" and my first reaction once the smoke cleared and before the markets reopened was to throw the cash back into equities with market orders only to spit in bin Laden's face and support my countrymen in NY. I think if the same event were to reoccur today, I'd be cheering bin Laden instead. How strange is that, how far have we come.
  • A Yahoo! User
    5 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
    A Yahoo! User Fri Sep 03, 2010 10:55 am EDT Report Abuse
    Wall Street moonshots while Main Street only sees tumbleweeds. I continue to be amazed at the disconnect between the two but I guess that's to be expected when one has unconditional government backstopping while the other is left to fend for itself. It's a shame the Wall Street backstop wasn't in place prior to March 09 when it might have done all of us some good instead of only a select few in NY.
  • 3 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 1 users disliked this comment
    frankmargel.com Fri Sep 03, 2010 10:11 am EDT Report Abuse
    The market is not doing well, don't kid yourself? The bailout nation is upon us all! Hardly a massive rally... Pitiful! The Dow approaches 14k, That is huge! I don't see that happening, so chill out on the hype! Thanks! Just wow... LMFAO! Where is the value in switching from bonds to stocks and churning accounts over and over again? That is not value, that is a kooky shell game, just kooky! Buy a cloud formation it will last longer than this hype! Just more wow!
  • 1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 1 users disliked this comment
    RV Fri Sep 03, 2010 10:09 am EDT Report Abuse
    I know. It's the "Empty Suit Omen"

Post a comment

Sign in to post a comment, or Sign up for a free account.
Quotes delayed, except where indicated otherwise. Delay times are 15 mins for NASDAQ, NYSE and Amex. See also delay times for other exchanges.

Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quotes are delayed at least 15 minutes for NASDAQ, NYSE and Amex. See also delay times for other exchanges. Real-Time continuous streaming quotes are available through our premium service. You may turn streaming quotes on or off. Fundamental company data provided by Capital IQ. Financials data provided by Edgar Online. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Analyst estimates data provided by Thomson Financial Network. All data provided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.