by Sy Harding, | December 12, 2008
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What is going on reminds me of a remark attributed to J.P. Morgan back in the early 1900’s that, “Bear markets return stocks to their rightful owners”. By that he meant that smart money or ‘rightful owners’ sell their stocks temporarily to public investors at high prices near market tops, but then buy them back at low prices when investors bail out at the lows of the subsequent bear markets.

What is going on reminded me of his arrogant remark because, while public investors have been bailing out at such a frenzied pace over the last couple of months, others have been quietly buying so heavily that not only did it offset all that selling, but was sufficient to produce a gain of 20.8% by the S&P 500 from its November low to its high last week.

The volatility has continued, but in the process the market has been in a bullish pattern of higher highs on the rallies and higher lows on the brief pullbacks.

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