It’s such a magical mysteria
When you get that feeling, when you start believing.
– Def Leopard, “Hysteria”
You know a lot of people think the bottom is in when UBS announces a $19 billion writedown, the ISM Manufacturing Index for March comes in at 48.6 (below 50 means contraction) – and the major indexes are all up more than 2%.
Listening to commentary on CNBC today, the bulls are getting arrogant. What was a trickle of bottom calling last week has become an avalanche.
Today reminds me of early October when stocks would rally on massive writedowns by the banks with the idea being that it marked the worst. See, for example, “Like Whatever! Banks Preview Ugly 3rd Quarter Earnings – And The Dow Hits An All Time High”, Top Gun FP, Monday October 1, 2007. Remember how that ended?
It can last a few more days, maybe a week. Not much more than that. 1400 on the S&P is the line in the sand. We’ll see if the bulls can take that out. I doubt they can.