I will be covering a global stock market performance round-up after the month end, but thought it would make for interesting reading to briefly review the action of the past three days.

The numbers speak for themselves, showing the MSCI World Index and the MSCI Emerging Markets index surging by 14.2% and 23.5% respectively since Monday's closing levels. Strong stuff indeed, but these rallies still leave the two indices down by 43.4% and 58.1% respectively since the highs of October last year.

The strongest performers over the past few days were Russia (+37.0%), Hong Kong (+30.1%), Brazil (+27.2%) and Japan (+26.1%). This begs the question: Are these bourses back in bull markets according the traditional definition of a 20% improvement?

On the other end of the scale, the following markets were left behind: New Zealand (-0.6%), Venezuela (-0.6%), China (+2.3%), the Russell 2000 Index (+4.2%) and Australia (+5.0%).

Here is Richard Russell's (Dow Theory Letters) take on matters: "Things are looking better. After a series of 90% down-days, we had a 90% up-day on Tuesday, October 28. Since then, the market action has been fairly good. With bonds appearing to have topped out, I'm beginning to think that there's a fairly good chance the market has bottomed. Adding to the bullish case, Lowry's published a significant contraction in selling pressure today."

I give the current rally the benefit of the doubt provided the recent lows (8,176 on the Dow Jones Industrial Index and 849 on the S&P 500 Index) do not get taken out. However, it remains difficult to say whether a secular low has been reached in an environment of economic and profit recession. At least, the extent to which central banks, governments and the IMF are becoming involved to fend off a total economic meltdown is a sign that we could be in a bottoming-out phase of the bear market.

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