November 2011 In Review, December Preview

The market looked like November was going to be a killer month. If October of 2011 was the best month on the S&P since 1974, then by Thanksgiving, Wednesday 23 November 2011 after the close, November 2011 was already on track to become the worst November since 1987’s Housing Bubble (-8.99%). The loss on the DOW for the month (-5.8%) had already surpassed the November 2008 drop (-5.07%) and the November 2000 dip (-5.33%). And we only had three and a half days of trading remaining. In my Daily Market Analysis on Monday 28 November before the market opened, I said;

With three sessions remaining, its going to take a major rally of 346 points for the DOW to get back up to break even for the year. Even if that happens, November is set to close in the red as it will take a massive 720 point rally (or 240 points a day for three straight days) to break even for the month. It looks like the bear run that started in May is set to continue after that quick reprieve in October.

And whenever you least expect it, the impossible becomes possible. The last three days of November produced an amazing 813 points on the DOW to close out the month in positive territory. With that, of course, the DOW is back up in positive territory for the year too. And for the record, Wednesday 30 November 2011 was the DOW’s largest gain of 2011 and the best percentage gain since March 2009. Despite today’s run-up, the Nasdaq and S&P 500 are down for the year.

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