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Originally Posted by Smooth Operator
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The markets did get way over sold. It was a situation where stocks were being valued based on a worst case scenario. Right now things look a little better and people are starting to think that the worst may be over. People are thinking that there could be a recovery in the economy starting next year.
I think this market probably goes higher over the next month or two. But once people figure out that there isn't going to be a recovery and when they figure out that the worst is not over, you will see the market make new lows. I bet you that in one year from now stocks will be much lower than they are now.
This is nothing more than a bear-market rally. But as long as a high percentage of people think that this is only a bear-market rally, the market will continue to go higher. When it finally gets to the pont where everyone is convinced that we are in a new bull market and everyone is back in, that is when this market will take a huge dive. We're not quite to that point yet but I think we will be in another month or two.