In my opinion, the drastic sell-offs in August and September were not rational. Prices were driven down by the cumulative effect of everyone believing that their worst fears might turn out to be true. This gave many the confidence that the Fed would provide all the liquidity the markets needed to prevent a recession. Brazil maintains that it will pass necessary measures to correct its balance of payments problems. President Clinton appears more secure in his job but with less influence to change agendas.
Stock markets hate change.
When they do nothing, they don't hurt anybody. When they do something is when they become dangerous. There are many opinions about the market and it is an amazing recovery from the depths of gloom. The optimists agree with stock analyst Abby Cohen who believes the Dow is headed to 9,500 over the next 12 months. I believe the surge in prices of smaller company stocks is long overdue.