CHESSNOID

The stock markets finally had a bounce today. It didn’t look like that after the first hour. The last few days have been discouraging for investors. I think this relief rally was good to see. The numbers seemed to skyrocket after Obama announced his Treasury pick.

The technicals and fundamentals are all still trending down and have not flattened out, so this rally was definitely headline news driven. I don’t have an opinion yet on his pick but he is already on the Federal Reserve policy making committee. CNN.Money:

However, Selkin noted that the market has been technically “oversold” for quite some time and that it could have remained oversold today had the reports not started circulating.

In particular, Wall Street seemed to welcome Obama’s reported pick of Geithner, the vice chairman of the Federal Reserve’s policy-setting committee. Geithner was the Fed’s point person on the rescue of Bear Stearns and AIG. Selkin said that investors are betting that he might help broker a deal this weekend to save Citigroup too.

“It’s not just that Wall Street likes Geithner, it’s that there’s relief that the incoming administration is taking some concrete steps to deal with the crisis,” Selkin said.

Looking forward, stocks aren’t likely to see a lasting rally, with the markets continuing to be driven by the day-to-day news, said Ron Kiddoo, chief investment officer at Cozad Asset Management.

This market did break the 8,000 floor so I suspect it will revisit that floor again. It is hard to predict the bottom, but many think it might be 7,000 and some even 6,000 and a few 5,000. Those are all just guesses and no one really knows. My prediction is that when we do hit the bottom whatever that number is, we will languish in a range for a long time. I am not talking about a few months but think it might be a few years.

If the stock markets haven’t scared you off completely, I think if you have a 10 to 15 year time horizon, you will be better off picking some good stocks soon and dollar cost averaging into it. Of course, that is just an opinion. I believe historically, you do come out ahead if you consistently stayed invested in stocks in any 15 year period. Don’t quote me on that, just google it yourself.