The stock market rally on July 17 was precipitated by better-than-expected earnings reports.  This caused short sellers to cover for two days.  Whether this short covering rally will stimulate investors back to the market remains to be seen.  However, it could drive the Dow back to challenge lower lows, which brings me to the subject I need to address in this commentary.  I misstated in the commentary dated May 27 that “If the economy is officially in a bear market, it will make the market two more lower lows and two more higher highs before the final low occurs.”  What I meant to say is that we may see two more lower lows and two more lower highs.  It’s possible we could see that in this rally.

Are we in recession?  I discuss this in my July newsletter, Kenneth Coleman’s Investment Tracker.

Sincerely,

Kenneth Coleman