For a moment it seemed like my prediction of further challenges ahead was, in fact, picking the bottom of this mess. Surely everyone rejoiced on Monday when the market saw the largest point increase ever. Alas it turns out we are indeed not done. Surely enough, the news is now coming out about the real economy going down, the market is down some 5%, and I think it is likely to be worse in October since the downturn probably accelerated in the back end of the month which means more bad news can be expected.
So for those that saw Monday as a huge relief, hold it. On a related note, this chart helps put Monday's gain in perspective and demonstrates an interesting point. Namely it shows that the largest % gains in history occured during the depression which isn't necessarily to say that we are experiencing a second great depression. Instead it helps to point out that large gains should not be interpreted as a guarantee of things getting better.