Market Bottom?

The action in the US financial markets today was very strong, closing at the high levels of the day on substantially increased volume. This gives the market an opportunity to shift gears and embark on a new direction.

Until we get confirmation of the new rally attempt, it is still cautionary to take only minimal positions.

However, I get the sense the bottom is very close if not already here. Gold is through the roof, commodity pricing has exploded, oil is attacking $110 per barrel, job losses are expanding, sales of new and existing homes are minimal while inventories are at record levels, the technical charts of most of the S&P 500 are a mess and the financials are a disaster. Additional bad news could sink the boat. Before today, just about everyone seemed to have thrown in the towel.

On the plus side, the rate cuts imposed by the Federal Reserve are about to be realized in the economy. At this time, most investors look for potential leadership to emerge.

Perhaps Wal-Mart (WMT:NYSE) is telling a story. As shown on the chart below, WMT began heading down starting in July of 2007. Wal Mart bottomed in September, just about the time everyone else started to recognize problems in the economy. Since then, Wally World has steadily risen and looks about ready to break to intermediate highs. You could say WMT is the place people shop when times are tough, or you could stay the course and proclaim WMT a leader. In similar fashion to how WMT led on the way down, it is now leading on the way up. Greed is set to overtake fear. Just sayin!