A New Bull Market?

Is the action in the markets over the past week the start of a new bull market? I don't believe so. There are still too many unknowns in the economy and even the world backdrop is unsettling. This is likely going to be a somewhat strong short-covering fueled rally that will eventually run out of steam. The result will be a retest of the lows in some form and some more sideways action until the economic picture becomes a bit less foggier.

Look to make a few upside trades on pullbacks with the idea that the S&P 500 could get back to the 900 area. As always, do not hesitate to bail out of positions if the markets do an 180. We still could see much downside pressure if earnings revisions start to come in well below expectations. It is interesting to note that the NYSE composite retested its 40 year uptrend line and has bounced well off of it this week. We are not out of the woods yet, as Obama and his socialistic nonsense is surely to put a damper on any sustained economic improvements. Raising taxes is downright stupid and it goes to show you communism is alive and well in the Democratic party. Just look at what they have done to California. Take care.