This six week rally started with two important events:

The most obvious was the comment that the banks were going to actually make some money. Most investors would agree that the statement was important for the the rally to get underway this past March.

However, before that event there was another before it and LESS noticed by the public. The event was a surprising advance in the Israel market the previous Sunday. To say the least it was totally unexpected.

If you have the time you may wish to look at the Israel chart this morning:

http://www.tase.co.il/TASEEng/Homepage.htm

Since they are closed on Friday and end their session on Thursday before we close there should have been catch up with our (U.S.) markets.

Add to this the comment of the CEO of the NYSE who stated that the rally at least in March happened with “no really money” - his words not mine.

So despite if the earnings come out good or bad in the days ahead, the market’s rally based on history is over for a bit.

If you are not a techical trader, than consider the factors that are still in play:

1) no pickup in new home construction
2) Commercial real estate getting worse - i.e. General Growth event
3) home prices NOT recovering
4) no improvement to speak of on the employment front
5) the extent of the upcoming GM bankruptcy and what the effect will be
6) retail sales still depressed as well as consumer spending
7) the lack of sufficient lending by the banks
No plan that I’m aware of to pay for the trillions being spent
9) Finally, and most importantly the public being scared to make major purchases and venture capital nowhere to be found.

So we have had our bear market rally, and we posted in March when this started that 8,000 on the Dow was about it.

Well, we made it a little above that level.

We’ll see what happens but those hoping to continue making money on the long side may be disappointed.

Enjoy your Sunday!!!

Related Posts:

• Dubai crisis is not strong enough to “correct” this irrational market.
• Maybe this time the bottom will fall out, and we are in for the real drop!
• The bankruptcy of GM, is not at all factored into the price of GM stock itself
• The true effects of the recession:
• Some thoughts about the market:

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