Rafael Grillo

Sucker's Rally Approaching an End

Rally? I am not sure I would call the recent move a rally. We are stilll struggling to stay at Dow 8,000. Just 6 months ago 8,000 was unfathomable. For me, it was more a recovery of an irrational, panic-driven un-rally (yes, irrationality doesn't always have to be exhuberant). Does it mean we should expect further gains? Nope. Buit it doesn't mean we have to brace for doomsday either. At 8,000 we already are in bad shape. More than ever before, it is a stock-pickers market. Great time for a 25 yr-old to add to his S&P 500. Not so good idea for the rest of us. I agree with most: be nimble, remain unemotional and enjoy the volatility. It's going to be a trading range for a while. Don't waste your money trying to buy for the long-haul. Make the quick buck and call it a day. Inflation is coming (the only way to cope with the excessive leverage), so the pain is here to stay for a long time.