Monday’s trading brought welcome relief with stunning gains following eight straight days of severe market declines. The market recorded the largest one day percentage gain since the Great Depression era in 1933. The global markets also showed big increases following support and intervention by central banks across the globe.

We welcome the relief, and like to see the market go up. However, we would caution that the market’s trading behavior is still quite extreme. Last week marked the worst trading week ever and yesterday marked the best gain in 69 years. We think the market is close to the bottom, but we want to see stability in the market, including lower volatility. When this happens, investors will show more confidence in the market, and money flows should return. Hopefully, this week will be the start of a larger trend reversal, where the market ends its downward momentum.

In our minds, the economy and financial sector have a long way to go before things significantly improve. However, if the market is near its bottom, and the bleeding stops, we can make money investing in equities despite a struggling economy.