We wrote this comment one year ago (May 15, 2008). At that time the Dow was close to 13,000 and the S&P 500 was trading at 1425 and was breaking out through resistance. Many economists were backing away from their recession forecasts due to stronger than expected economic releases during early May (called "Green Shoots" today). After that comment was written the market rose to 1426 the next day before dropping sharply for the next 10 months. You will see how many of the headwinds mentioned in that comment are still of hurricane force even today. We expect the bear market rally that we are experiencing now will reverse and the secular bear market to resume soon. We have attached a NDR chart showing the many counter trend rallies that Japan experienced during their secular bear market, and the similarity to our market. We expect many counter trend rallies during the U.S. secular bear market as well.
The following link will take you to the report written one year ago, but still not out of date: