Whistling Past the Graveyard?

Futures are easing a bit this morning and the rally cry is that the recession is over, I recall in excruciating detail last year the same sentiment by many, then Lehman collapsed, I guess they were just “a little off.” Bernanke couldn’t even let the “R” word leave his lips until we were hip deep in the worst recession since the Depression.

The S&P is up 50% off the lows and the Dow Jones tagged a 38% retracement off its lows on Friday. The risk trade appears to be back on as the dollar is finally showing strength.

The S&P is now fully discounting over 4% GDP growth for next year and seems priced for perfection. We saw a less bad unemployment report on Friday, but  we are months if not years away from the consumer stepping back up to the plate to buy “stuff.”

The financial media is having a blast with this “new bull market”, as they always do, and they have successfully located, dusted off and dragged out their favorite perma bulls that have been wrong every day for the last two years. I’m glad they are back because I really need to be told how to invest after a 50% move up in the markets.

China is up 80% this year and other emerging markets are up 40 or 50% so far. Much of this rally has also been led by “junk” names which is always a sign of a near term top.

Be careful, enjoy the bump, but don’t get married. Good luck.

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