I think the question is, when does a rally in the market go from: 1) prices moving up based on fundamentals, and new information that leads to increased valuation to 2) prices increasing due to the "greater fool theory" The beginning of any rally could be justified or appropriate given the addition of new information to investors. But what if the Dow went up 100 points every day from now until the end of May? At some point, a rally becomes attributable to mass frenzy and a correction is inevitable. The magnitute should be proportional to the size and speed of the run-up.
The currect rally which is linear will eventually morph into a parabolic 'super rally' within the next 5-7 years. The nasdaq will peak around 7,000-9,000 and the dow will peak at 20,000 Nasdaq 3000 is only 360 points away
Take a look at the currency you use, that's the answer. I'm amazed so many people have a problem understanding that concept. They are not really going up, most of it is just adjusting.
I'm wondering how many of those people that thought the Dow would have 19+ up days in May think that there are a total of 31 trading days in May...:eek:
HON +22.68% ytd CAT +19.68% ytd and today's stars? GM + 3.64% TODAY! headline: GMAC has $305mm Q1 loss on home loans. There's a company I want in my portfolio! (not) earnings release tomorrow... gee, I wonder if it's going to be stronger than expected?