While I love Marc’s insights and usually respect his calls I would beg to differ on this one. He is not always right on US stocks, and missed the 2003 March bottom completely. I think he might be missing the bigger picture and assigning US investor optimism too larger role in the global economy. Also the 30s stock comparison suggests a big rally will be followed by an even bigger fall. Markets do not bottom until investors actually sell out – and that they did not do that on March 6th, only 2% cashed out. For a true bottom investors have to exit en masse. Wait it is coming!

By: Clive Maund

– Posted Tuesday, 26 May 2009 | Digg This Article | Share this article | Source: GoldSeek.com

Fundamentally the rally in the broad stockmarket from early in March is viewed as being the result of a combination of media hype, wishful thinking and short covering, but there may be more to it than that – it would appear that a sizeable proportion of the TARP (Troubled Asset Relief Program) funds not thus far deployed have been used to drive up the stockmarkets in order to create a positive environment for the banks to issue secondary shares and thus raise equity. While this is perfectly understandable, it also means that once the banks have finished selling this stock to the public, or the market is simply exhausted by being soaked in this way, it is likely to go into reverse in a big way.