What are your thoughts on the current stock rally?

[edhopper]

I think it's a typical Bear Market Rally. In other words, we will visit the bottom again. What do you think?

http://en.wikipedia.org/wiki/Market_trends#Bear_market

[billyoc]

1. Yes, bargain hunting vultures picking over a corpse.

[FreakinDJ]

2. I think it is going to trend upwards

in other words it is not the "Dead Cat Bounce" Rush LimpDick is proclaiming it to be

[edhopper]

4. Wow!

Rush is actually right about something.

Here is some more info:
http://www.ritholtz.com/blog/2009/04/four-markers-of-an-economic-turnaround/

[FreakinDJ]

7. I bought back in at 6700

and can sell out again if I need to

I'm already up quite a bit and think when rush's listeners realize following his direction screwed the hell out of their pension plans they well be pissed

[Zynx]

11. The argument about the Russell 2000 versus the S&P 500 is a little suspicious.

That's a poor correlative argument. They base the argument on the previous downturn in this cycle, but they don't mention that in our last bear market when the S&P declined approximately 50% the Russell 2000 outperformed the S&P 500 frequently by more than 10%. Three months into the rally it was outperforming the S&P 500 by 10%. Six months later it was outperforming it by 20%. By the beginning of the next year it was outperforming it by 30%.

The rest of the argument is solid. That part is poor analysis.

[girl gone mad]

17. David Rosenberg of Bank of America/Merrill Lynch..

made the exact same observation last week.

He said that the two groups that paced the sharp upswing were financials and consumer cyclicals, in which there are, respectively, net short positions of 5 billion and 2.7 billion shares. Which strongly suggests that not an insignificant part of the rally has been provided by shorts running for cover.

He also pointed out that the Russell 2000 small-cap index is up 36% since the March low, and has outperformed the S&P by some 980 basis points.

David said, "the last time it pulled such a massive rabbit out of the hat" was in the stretch from late November to early January, and the major averages proceeded to make new lows two months later.

[patrice]

3. I think there's some really horrendous knife fights going on behind, Behind the Scene.

Internal bleeding.

[patrice]

10. Soon to be followed by choruses of "Et tu Brute?"

[Buzz Clik]

5. Buy,Buy BUY!!!!

[Zynx]

6. I think this(plus maybe 4%) is the highest we go for a while.

I would be surprised if we made substantial new lows. The rate of decline in economic data has been lessening and we have seen credit spreads narrow a great deal. We are past the scariest parts of this, but not I would be hesitant to say we are past the worst since a 10.5% unemployment rate seems likely. Typically, the recovery from a financial crisis takes a while to gain traction, however.

[scheming daemons]

8. 6 straight weeks is a little long for a bear rally.... this might be the real deal

Stocks were WAY oversold at the end of February.


I think we'll look back on 2009 as the beginning of a bull run.

[Zynx]

13. We had some fairly long rallies in the 2000-2002 period. On the other hand

sometimes rallies like this have happened in the middle of economic catastrophe like in 1974 and 1982 and then they just keep going and going and everyone doubts them, like now.

[ChimpersMcSmirkers]

16. Yeah, the s&p is starting to break through resistance. The nasdaq looks even better.

Rally's in a bear trend should be getting rejected. They still might, but it's starting to look more and more unlikely.

[Tierra_y_Libertad]

9. Rearangement of the deck chairs in vain hope that the iceberg is melting.

[rucky]

12. It's closer to reflecting true value than 14K was

and 6700 was.

[Zynx]

14. What's funny is that 14,000 at the time was not absurd.

The PE ratio was not extreme by any historic standard. The issue was that the "E" there was much softer than analysts and traders surmised.

[ChimpersMcSmirkers]

15. We've probably hit bottom. If nothing else, the market will

base sideways. There will probably be a decent correction of this current rally, but I don't think we'll make new lows. Tech, Small and midcap are leading right now. I'd watch these along with the s&p instead of the dow. The dow is lagging right now.

This graph is pretty generalized but it gives you an idea of what sectors perform best during different parts of the business cycle.


Tech and finance are outperforming which is consistent with this cycle graph. Transports are starting to perk a bit as well. What's really surprised me is how well some retailing stocks have done.


Three month industry group returns:
http://www.prophet.net/explore/sectorPerformance.jsp?sortBy=1207267200000&orderBy=-1&interval=7&showPercent=false&period=3m

[underpants]

20. We aren't close to bottom

the banker crowd had a setback-that ain't bottom

the commercial real estate market is about to got tits up-that ain't bottom

bottom is bottom and it will be ugly. And everyone is going to running to Uncle Sucker for money....and they will get it. THEN we will be in the administration phase.

[ohheckyeah]

18. Firmly place tin foil hat on your head before reading further -

all I know is that as soon as the banks found out they weren't going to get money without any stipulations and strings things started getting better.

Sort of like when Bush left office and the Democrats started talking wind fall profit taxes the price of gas dropped by roughly $2.00 per gallon.

I think a lot of our "crisis" was manufactured.

[underpants]

19. I'd trust my money more with a crack dealer

at least they are selling an actual product

AND it is local/organic!!!

[eridani]

21. I'm more interested in the real economy

That is, the one that is about producing goods and providing services. Employment patterns and wages are still on a very bad track, IMO.

[Deja Q]

24. We could legalize prostitution...

Sex, Sex, SEX!!!

Of course, those wages will be kept artificially low too. Like Green jobs, IT, or anything that requires effort... except disc jockeys and radio talk show hosts of course... Rush needs his oxy...

[Kip Humphrey]

22. I'm still sidelined. Easing mark-to-market rules has helped balance sheets but

1. The hedge fund and derivative private markets must still be regulated so capital remains largely locked up in illiquid instruments.
2. Short selling must be reigned in (i.e., more heavily regulated - see #3) and naked short selling must be banned (and that ban enforced) to reestablish order to regulated markets.
3. Margin requirements must still be increased which, once executed, will soak up capital that will be unavailable for investment.

These actions remain to be executed in order to stabilize the economy but both will come with a price to economic growth. Therefore, the economic retraction has farther to go and I remain on the sidelines.


That said, there is money to be made in this environment day-trading, which I don't participate in because I have a day job.

[doc03]

23. The Dow will end the year above 9500

How do I know this? I don't have a clue but I think it will.

[JVS]

25. Shove enough money up a bank's ass and it's bound to start spewing the money out the other end.

Banks turn a profit, doesn't mean they're solvent.