It looks to me as if there is a strong possibility in this rally continuing....however, don't be suprised if it falls off a cliff.
Everyone is watching the SPX 1040 level for a breakdown. If it breaks watch for some fireworks.
Nevertheless, it looks like Ben could keep the music going a little longer. There is some heavy buying going on, some not seen since the March 2009 lows. Dollar bulls are at record highs (bad for market) and market participants are just as pessimistic now as they were near the March 09' lows.
What the verdict? .......it smells like a rally a coming
On The Descent Into A Weimar Reality - More and more pundits claim that the true historical analog to our current tumultuous times are not the days after 1929, but the period between 1919 and 1923 in post WW I Germany, also known as th Weimar Republic.
The Ultimate Hedge in Economic Crisis - Consider health care the ultimate hedge in times of economic crisis. Not only is it the last area that people cut back, it doesn't lose value in good times, as gold does. As a percentage of our economy, health care overshadows sectors that are far more subject to economic fluctuations, such as energy.
2007 saw the collapse of the largest housing bubble in U.S. history, the lead up to this collapse is shown in chart #1.
The U.S. reflation trade of 2009 and early 2010 also was fueled by a massive amount of liquidity, creating another bubble in the U.S. equity markets. This can be seen in chart #2. Notice the similarities in the rise of 2006/2007 to 2009/2010.
What if the collapse of this bubble mirrors the collapse of 2007/2008? Check out chart #3, we could be in for another bumpy couple of years.