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We've Rallied Over 40%- So Now What?

When the Chinese PMI numbers came out last night and showed that the export index crossed over into expansion territory, global equity markets were off to the races. Domestically the S&P 500 closed up another 2.58% and, more importantly, closed above the 200-day moving average for the first time in 524 calendar days. Commodity prices, crude especially, have been on an absolute tear recently. But now we've come over 40% in less than 3 months and the trillion dollar question is has this all been pure speculative lunacy or is there organic growth taking place. When you've seen seemingly endless amounts of artificial sweetener dumped on the economy, how can you really tell? Unemployment is on the way up- even if you account for the over 1 million people being hired for the 2010 census that are netted against the non-farm payrolls number. Housing prices, on average, are falling and with more foreclosures on the horizon, they don't look like they're headed in any other direction but south. On the other hand, there are businesses out there that are running more efficiently and the product pipeline in technology over the coming weeks and months could legitimize those gains. But for everybody else that has just been along for the ride, when do they get bounced? About the only that is clear is until we stop with the economic Sweet n Low, Equal, and Splenda, what happens next is anybody's guess.