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Originally Posted by Rupert Pupkin
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.
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Well put.
Let me add...when you flood the world with currency, what is going to happen to equities? Are US companies in any better shape NOW than they were before the rally started?
Rupert is a wise man.