How Stocks Can Predict No Double Dip Recessions
There has been much speculation about the stock market and possibility of a double dip recession. However, there are number of way to show this will not happen. Since we like stocks here at TKO, we have examples of how stocks can prove a no double dip recession. According to Jon Ogg, here are the tell tale signs the stock market can give.
October of 2011 is turning out to be a phenomenal month. This may be the best in a generation. Not only did the DJIA get back above 12,000 after the E.U. stabilization and Greek debt haircut but this is up from the low of just under 10,400 for better than a 16% gain from the low. This also happened during earnings season and we have witnessed the CBOE Volatility Index (The fear index) drop from a peak of above 45 down to almost 25, showing that the fear is drying up. And the best news is that Apple Inc. (NASDAQ: AAPL) was only up about 5% so the market itself broadly outperformed Wall Street’s favorite darling. You cannot have an infrastructure recovery without Caterpillar Inc. (NYSE: CAT) and its stock has risen a whopping 37% from the first day of October. The two DJIA banks of J.P. Morgan Chase & Co. (NYSE: JPM) and Bank of America Corporation (NYSE: BAC) are both up just over 30% each from the first day of October. Even a bear market bounce would not be this big if a recession was imminent. The caveat: even a remedial chartist and a cocktail napkin chartist can recognize that stocks over the last three weeks have moved from very oversold to extremely overbought.
These are come good tips to carry with you. Considering the recent market volatility, these are some good things to know. Good luck with your future investments, and hopefully this helps you with warning signs.
Quotes taken from report by Jon Ogg, Read the entire article here.
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