I am a little surprised to see the market running so hard, so quickly after enduring the shock and awe that hit us in October and November of 2008, and the numbing malaise that laid us flat in Feb/March 2009. I can understand a big bounce off the bottom, given the magnitude of the decline, but then I would have expected the market to consolidate its gain and move forward in a more measured manner (especially given the cloudiness of the future). Strangely, this does not appear to be happening. Which leads me to think, maybe we haven't learnt anything from our recent brush with pure, unadulterated risk.
In trying to interpret these movements, the thought occurs to me that maybe as the Feb/March cascade was anomalous (and I think it was), perhaps the cascade move below 1200 in Oct/Nov was also anomalous (I'm not so sure about that). If that were so, then in essence, the market made not one, but two really big mistakes in risk assessment. And if that were the case, then we could possibly see a super spike back to 1200 to backfill the market's mistake. Such a thought is a red rag to the bulls, and a repudiation to anyone concerned with market efficiency and conservatism.
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