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Global Markets in Review: Pros and Cons of a Pullback

More likely the next run down will be initiated by profit taking among traders and investors and by those investors who had bought high and trying to sell closer to buy price as this relief rally continues to it's conclusion.

More sell-off will prevent an attempted rally if the unemployment goes higher and the next earnings report proved more negative than expected.

Then finally, the what they call the capitulation sell-off can be triggered by the end of the year by many factors such as deteriorating government financial balance sheet; consumers going into a severe crunchdown as unemployment remained un-addressed by the government; SnP earnings; news companies both financials and non-financials going bankcrupt on day to day basis as they burn-out their reserve capital with the banks still in credit crisis mode; or even man-made catastrope similar to 9/11 or those that can be caused by nature such as Katrina, the Tsunami of Thailand, the earthquakes of China, or the SARS of Hongkong.

None of the original causes of this downturn has been solved. While new problems had been created.

The panic sell-offs of Aug 2008 to Mar 2009 may have been over-done as compared to the original problems of housing bubble meltdown and the ensuing banking crisis.

However, the cumulated sell-offs may not have priced-in yet the current domino-effect problems such as surging unemployment rate, prolonged consumer crunchdown, earnings deterioration due to consumer boycotts; local governments going bankcrupt; and perhaps next shoe to drop = waves after waves of small to medium size companies going bankcrupt as they run out of cash. A couple or two giant companies going bankcrupt can only add to the potential next wave of stock market panic selling.