The Second Derivative

The market has been responding to the 2nd derivative of decline recently - celebrating the fact that the economy is falling apart less slowly (and showing relief that global implosion is a much reduced probability). I can see the market staying positive through the 2nd and even into the 3rd quarters as it remains hopeful of a recovery (newsflow will likely highlight slowing declines). But the rubber will meet the road in the 3rd and 4th quarters as the market's courage is tested by whether a recovery really is likely or renewed concern over continuing weakness (ongoing deleveraging, rising (albeit at a slower pace) unemployment, ongoing debt/solveny issues among financial institutions, consumers, etc.). Q. How much more rally is left in this market? Ans. Potentially quite a bit. If the market remains in its current positive disposition, then it is quite possible to see 1000-1100 on the SandP 500. I think we're currently in the middle of a long term trading range of roughly 700-1100.