Enough already! The market is being held up, pressure will release when geitner say’s so. There is nothing fundamental about the behaviour of this market. It is comepletely irrational and will continue to make fools of those trying to pick the inevitable correction.

In 1929 and 1930 the government did not inject $780 Billion USD into the stock market. The difference here today is that the government injected those funds into the market to keep the market from tanking. The only way I can see it tanking big time is if the government sells what they bought which would defeat their purpose of bringing stability to the market.

I know this market has to turn around sooner or later but as of now they still have funds from the stimulus package and some of the banks already returned money back from TARP. Perhaps the government will sell when it gets all its money back…

We are almost at 10,000 now for the DOW and LVS went from 1.38 to over $20 in less then 6 months!!!

Ed Note: yes but in 1929-30 global trade did not drop by 11% and debt levels were very much lower – whatever the government has done or can do will not compensate for the consumer and private sector going down. The recovery is not happening except in financial markets and they are completely misreading the economic outlook.

The US stock market could easily go up for another year. Remember the dotcom bubble? How logical was that! Stocks are only worth what people think that they are worth. Even peak oil is no absolute guarantee that stocks will fall, although I think that they will. Since the dotcom era, stocks have overcorrected both to good and bad news. Expect that to continue. My rule is to never put money into the stock market that you cannot afford to lose. Why? Well, suppose India and Pakistan nuke each other tomorrow. Suppose a nuke levels any city for any reason. World trade will virtually end for quite a while. Where do you think the market will go when that news breaks? It will be “Look out below.” And, you know what, if we don’t outlaw nuclear weapons, it will eventually happen, probably by accident or terrorism. Experts don’t say to diversify into real estate, precious metals, stocks, and bonds for nothing.
Ed note: Bill l think you would agree that the economy looked a lot healthier in 1999, the rally today is a different matter entirely – but you are of course absolutely right on diversification.

The daily volumes are now finally picking up, often major turning points are marked with spikes in volume.

This Friday is quadruple witching, which also can mark a turning point as stock prices are “pinned” to options strikes with large open interest in such a manner that the options expire worthless.

The market needs a catalyst to prick the bubble of upward momentum. Not always easy to identify these events except in hindsight.

David Rosenberg:

“The incoming economic data in both the US and Canada have improved and for the most part [are] bettering expectations. The dilemma is that market pricing has moved far beyond the fundamentals. Despite the temptation to jump into a ‘liquidity-induced’ rally…they cannot be sustained without a durable organic economic expansion. The problem is that the global economy in general, and the US economy in particular, is operating on so much medication that it is difficult to conduct an appropriate examination of the patient at the current time. All we know is that the markets seem to have very rapidly now priced in three years worth of recovery.

“The S&P 500 is now up more than 60% from the lows, which is truly amazing and kudos to those who called it. But the question is whether the fundamentals will ever catch up to this level of valuation – usually after a 60% rally, we are fully entrenched in the next business cycle. Never before have we seen the stock market rise so much off a low over such a short time period, and usually at this state, the economy has already created over one million new jobs – during this extremely flashy move, the US has shed 2.5 million jobs (as many as were lost in the entire 2001 recession).”

FT today reports:

In the US, the S&P 500 has risen nearly 60 per cent above its March low and the power of the rally has propelled the benchmark to its highest level above its 200-day moving average since May 1983.

“Not even during the great bull run of the 1990s did the S&P get this far above its 200-day,” says Justin Walters, co-founder of Bespoke Investment Group.

The 200-day moving average is a closely watched indicator of long-term sentiment and currently is at 20 per cent below the S&P 500 – a divergence that shows how strongly equities have rallied.

With price-earnings ratios extended, equities look expensive.

“Stocks are overbought and a slight correction would not be unexpected,” says Anthony Conroy, head of trading at BNYConvergEx. “A lot of people who were apprehensive about the market and waiting for a pull-back are moving off the sidelines. You get paid for performance, not sitting in cash.”

That sentiment has so far helped equities successfully navigate the often perilous month of September.

With the S&P 500 up nearly 20 per cent for the year, the spectre of performance-chasing by investors who have been underweight stocks could propel the market a lot higher, stretching valuations further.

“A lot of people missed the start of the rally and have resisted joining in as the equity market has risen well beyond what the economic data have justified,” says Bill Strazzullo, chief market strategist at Bell Curve Trading. “For the vast majority of people, stocks are the only game in town and we are seeing a lot of performance-chasing.”

All of this could push markets well beyond fundamental values, setting up investors for a big fall, unless the economy grows much faster than bulls currently assume.

“Something will break the current trend and I’m worried about the risk of a 1987 style one-day correction,” says Mr Ricchiuto.

There is so much mis-information handed out by the western media, that makes it virtually impossible to act on their information, let alone on the advice of the so called “experts”