CAPT GW

Will Bear Market Rally Continue or Stall Out?

There is a lot of smart money feeling bullish on the Obama Administration. And the normal rule of thumb is to buy when others are afraid, so last Thursday would have marked the day to buy as the VIX suggested record levels of fear. (But what about the role rational fear? On Thursday, it looked as if Citi, GM and any leveraged lender could be on the ropes. Was that irrational fear or irrational? And does record levels of fear FOR A GOOD REASON -- namely that we have a lame-duck administration with a POTUS, who, despite his Harvard MBA, has little comprehension of the profoundly risky situation over which he presides -- mean that the market should have repriced risk accordingly, therefore that buying on thursday would have been a fool's errand?

And is the market irrationally exuberant in factoring in the positive prospects under a new administratio when the new administration is 2 months from taking the reins?