Has the stock market finally hit bottom?

Has the stock market finally hit bottom?

 

 Since the rally began last week, the Dow is up 849 points, or 13 percent. A government report that home construction picked up in February was the latest bit of good news that rallied the market for a fifth straight day. Federal Reserve chairman Ben Bernanke also predicted earlier in the week that the recession could be over by the end of this year. Even the hard hit financial sector had some good news; Citigroup said they were actually making a profit during the first two months of the year. However don’t get too excited they also said increasing loan losses would offset those gains. Regardless the stock has rallied from a $1 to $2.51 in a matter of two weeks. Keep an eye out for 1st quarter earnings that will start to trickle out in the next month. Those earnings will either end this rally or keep the good times rolling. There are still some ominous clouds on the horizon that could sustain the recession. General Motors has a deadline regarding their feasibility plan at the end of March. GM is asking for another $16 billion without this cash infusion the company would likely file for chapter 11 bankruptcy. GM CEO says bankruptcy would cause automaker’s liquidation because buyers would be scared off. This would be devastating to the auto sector and many of its suppliers and of course the job losses would be immense. Also there is the question of do the banks need any more bail-out money? This would certainly create more uncertainty in the financial system and prolong the economic downturn. Despite the pending issues in the market and the economy I have to say we have hit a bottom. I think the bottom was when the DOW closed at 6547 on March 9th. This does not mean that it will be a V shaped recovery however it is a sign that we can finally see the light at the end of the tunnel. Stay tuned for happens next.