Sentiment on The Street has begun to turn positive as the stock market has enjoyed a sustained 7 day rally. Fears of a double dip recession are subsiding as companies report better than expected earnings this week.
The BP oil well has been capped, and durability testing is underway which proved to be a strong psychological hurdle for the market, and seems to have renewed hope that better times are ahead.
Update In Brief
After reading this, I considered some recent issues surrounding the economy and markets, and therefore wondered how how realistic the report was. My recent evaluation indicates the following conditions:
1. Gold is approaching very overbought levels.
2. The daily SP500 volume is going down while price return is increasing.
3. The ratio of gold (GLD) to the SP500 price return suggests very little gain of the SP500 in terms of "real money" over the last decade.
4. Monthly unemployment is not dropping substantially.
5. Those unemployed have not found work for the last 1-2 years.
6. Taxation on dividends is increasing at the end of the year.
7. You can still purchase a new automobile with no down payment, 0% interest, and no payments for several years.
8. Health care reform is going to be very expensive to fund, and the component involving free care coverage will require new money (debt) to be printed.
9. A very large proportion of US states (~75-80%) have economies that are not better than Greece's economy.
10. Basically, Gov't spending is "on steroids" at a time when it should be frugal.
Interestingly, by way of technical analysis, the Ichimoku chart (below) of the weekly SP500 showed a weak sell signal on 7/2. The last time this happened was the week ending 9/21/2007 -- almost 3 years ago!
Disclosure: Long cash, short-term Treasuries