Like recessions, one never knows the top or bottom of the stock market until it has passed; itís one of those things that can only be seen in the rear view mirror.
In retrospect, a young ďBullĒ was born July 12, 2006 just over a year after the death of the fourth bull run in the history of the Jamaica Stock Exchange (JSE).
The graph above depicts it well and shows the re-test of the July low a month later, on August 22nd, followed by a period of consolidation to mid November. The pre- Christmas rally then took charge and spiked the market, it held up to the point of disappointed earnings release in mid February 2007. By the third week of March the market gave it all back, retracing to almost where it began in November 2006 and reconsolidated through to the latter half of September 2007. A mini bull ensued from there to January 21, 2008 when the moving average line crossed the JSE main index from below signalling a breakout into bull territory.
With most companies already reported for Q4í07 and the majority have been positive, the continued advance of the market should dispel any notion that this was a mere Christmas rally. What is however unique, is that compared to other early stage Bulls, the blue chip companies are not the first out of the gate. For the current year to Feb 15th the top five best performers are Ciboney (300%), Pulse (103.8%), Mobay Ice (51.5%), Salada (40.7%) and Freeport (28.8%).
This rally is shaping up to be one of the few that every investor that gets in now and selects more than one stock will make money. Throwing darts at the board might not hit bullís eye, but the register will ring.
Source data: Jamaica Stock Exchange