Posted At : April 14, 2010 12:59 PM
The market has slowly and relentlessly moved higher at a glacial pace, averaging +.3% per day or the equivalent of +3 points on the S&P 500 Index. This has to be the most unloved rally I have ever seen in my 27+ years in the business. And investors remain cynical, pouring money into bonds at a rate of over $10 to $1 in stocks. This alone tells you that the easy money in bonds is over! Even though it doesn’t feel right, stocks are going higher. It’s earnings season and earnings are rebounding impressively, with corporate profits up over 30% year over year and set to be at record highs by the third quarter!
This does not mean throw caution to the wind. The rally of the last year has been predicting the “upside surprise,” and continued surprises will be hard to come by. At some point it will catch up with itself, although probably not until the unsuspecting individual investor gets in. That will signal the end of this bull run. And when it falls, it will fall hard. However, that is likely weeks or hopefully even months away.
Regards – Keith Springer