Are we there yet?
In our last Big Chart Review, on March 26th, I pointed out that we were still down 50% on most of our indexes and that we needed to get to 48% to consider it a proper rally. On Monday, the NYSE hit 48% on the nose, leaving only the SOX below that line in the US whilethe CAC still needs to cross that line to turn Europe bullish and, despite this morning’s 5% move in the Hang Seng, only the BSE has gotten back over the 50% off line in Asia so far.
As you can see from David Fry’s chart on the left, we have clearly made what looks like a “V” reversal and we are now heading into the second earnings season of the year – the first one did not end so well as we peaked out roughly at January options expiration day (April’s is Friday) and then double-topped in early February and fell off a very big cliff in a relentless, painful downturn that made us doubt whether America would even survive the crisis.
BUT EVERYTHING IS GREAT NOW! Yes that’s right, it’s just 6 weeks later and we are in the midst of an epic rally that has taken the US markets nearly 30% off their lows despite the fact that 3.9M people lost their jobs during those 6 weeks and despite the fact that GM is, in fact, about to file for bankruptcy and despite the fact that there has been no real improvement in the economic data and despite the fact that the Fed, in last week’s Beige Book, actually downgraded their outlook for our economy. Yes, happy days are here again and anyone who tells you otherwise is just not a chart guy! Forget the low volume, forget the fact that Goldman Sachs traded more for their Principal account than the next 14 firms COMBINED – manipulation is OK – everybody’s doing it, even the government (which is staffed by former GS people of course)…
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This is insane folks! If a single firm is going to trade 1.4Bn shares a day you would think they would actually be able to make MORE money than they did. Not to get off topic but what really amazed me about GS’s earnings is that they ditched the $1Bn they lost in December and no one seems to care. Last year, their Q1 was Dec, Jan and Feb but this…
