Can Lightning Strike Twice?

The market continues to grind higher, and why not? The Beige Book talked of a slowing pace of decline being reported by most of the 12 regional Feds, although there were no real nuggets to get too excited about. Nevertheless, that set the tone and then China came out and reassured the market of its monetary looseness. Odd that world markets don’t care when China goes down, but when it goes up, they take a fillip from it. Earnings on balance have been better today, German unemployment came in ahead, UK house prices are up 3 months in a row and the US jobless number was at least benign relative to expectations.

It’s the commodity complex that is leading the way with oil back up towards the 65 level and the resource stocks up the best part of 6%. The reaction from the resource currencies is more muted however. The Aussie and Loonie are a bit firmer but the Kiwi is suffering on the back of commentary from RBNZ Governor. Rates were unchanged as expected but he did say that “forecast recovery is based on further easing in financial conditions.” The money supply also came in considerably less than the previous month at 2.7% vs 5.6%.

So 1000 on the S&P looks like a sure thing right? I wouldn’t bet against it. Before it is cast in stone however, I did hear a little pearler of a stat earlier on. Now I haven’t verified it but it came from my better half, so it must be true or at a minimum, it certainly isn’t worth my while or welfare to cast doubt...so this is it: the 1929-1930 equity rally lasted 147 days and was 46% trough to peak. The rally off the March 6th low this year has been…wait for it…145 days and is 46% trough to peak. Freaky eh? So are the final days of this rally upon us? Unlikely? Probably, although contrary to popular belief, lightning does often strike twice...