If you ask me yesterday was a classic textbook example of a short squeeze. There has been a very large amount of short interest in the market. Bear market rallies are to be expected in bear markets. They usually come in the form of violent upswings. Remember the 600 point advance (in one day) off the low in Jan. This last rally is the same one we have seen about 50 times in the last 9 months. Since they can’t use saving AMBAC as an excuse any more, they had to come up with something new…i.e. $200 Billion in Fed lending against junk paper. I could be wrong as the markets are oh so humbling to us all but i don’t see an inflection point here just yet. The S&P is still forecasting 20% growth in earnings during the second half of 08, I ain’t buying that. I hope this rally has some strong legs because I have my eye on several puts that are looking cheap in sectors that I follow. I will say this the juice on the downside will only get less and less as time passes. it’s just my opinion that there is going to be a more significant low during 2008. We will see good luck to all.
