Is the Recession Over?

In a nutshell, the answer to the question of whether or not the recession is over, can only be answered by time. However, it does appear that situation is starting to get better and history has proven that the stock market rebounds before the overall economy. This notion can be further supported through the performance of the following equities:

The DIAMONDS Trust Series 1(DIA), closed at $92.63 on Thursday, up 42% since a March low of $65.44.

SPDRs(SPY) rebounding nicely from a March close of $68.11 to close at $99.89 on Thursday, an increase of 47%.

The PowerShares QQQ(QQQQ) closed at $39.38 on Thursday, up 53% from a March low of $25.74.

SPDR S&P Retail(XRT) closed at $31.16 on Thursday, a 71% increase from its low of $18.27 in March.

One must keep in mind that only time will tell us if this recession is over and for this reason risks are involved when investing in equities. To help mitigate these risks, an exit strategy is helpful. According to the most recent data at www.SmartStops.net, the price levels where an upward trend in the aforementioned equities would be in trouble are at the following: DIA at $89.04; SPY at $95.71; QQQQ at $38.08; XRT at $28.68. These price levels change as the markets fluctuate and updated data can be seen at www.SmartStops.net.

-- Written by Kevin Grewal in Laguna Niguel, Calif.

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