Tuesday, April 7, 2009

Wall Street's Recent Rally Coming to a Close

It looks to me that the recent vigorous rally on Wall Street is coming to a close. It looks like it was a typical bear market rally - short and sharp.

Why do I say this? The first reason is simply my contrarian instincts. Just turn on CNBC for a minute and all the bullish talking heads are back in full force. Not a good sign. I have also noticed a lot more bulls at sites such as Seeking Alpha spouting off. These bulls are actually laughing at the bearish arguments and saying that the US dollar and Treasuries will skyrocket while real assets like gold will plummet. Again - not a good sign for the longevity of the rally.

Let's look also at the major reason for this recent rally. This reason was the relaxation of the accounting rules for the banks. So-called investors were actually celebrating the fact that the banks were able to continue lying about the amount of losses in their loan portfolio?? They were celebrating the fact that there was an attempt to further bury the truth about banks - that many major banks are insolvent??

The stupidity of people never ceases to amaze me...................

No comments:

Post a Comment