At the beginning of this week, the investment advisory service I worked for posted this notice to their subscribers:

“We believe yesterday’s deeper-than-expected Fed rate cut, along with the market’s super-strong reaction, has kicked off the market’s next bull run. What impressed us most was the significant power shown in the broad market; up volume on the NYSE totaled nearly 30 times that of down volume, while advancing stocks outnumbered decliners by more than 9-to-1. (We get our figures from the Wall Street Journal, FYI.)

These are highly unusual readings … and history tells us they’re very bullish. Jason Goepfert of sentimentrader.com wrote that there have only been seven other times when up volume swamped down volume by 25-to-1 or more. Three months after these seven occasions, the S&P was up an average of 9.4%, and better yet, there was minimal drawdown during that time (read: the market didn’t pull back much at all after those big up days; it usually continued higher).”

At the end of the week, the markets closed – ending the best week of gains for 2007. And what a week it was! One of my core holdings, Baidu (BIDU), the “Google of China”, is up over 12%. In fact, because of its strong performance, my portfolio nearly doubled in value and is now up 22% for the year. I am sure I’m not the only one who benefited that much from this week either.