Everything is of course possible, but I think there are a lot of roadblocks to such an eventuality that early, in the second half, I would not be surprised, particularly since next year is election year. As I have mentioned some time ago, the most important factor, ample liquidity, is available, and the interest paid on MZM surely does not tempt one too much. I am afraid however that low interest rates, liquidity and government stimulation, may not be sufficient without cleaning the overhead from sellers. I have not seen since the lows last July/October any indication of sellers exhaustion. While the bottom in 1982 was not characterised by a cathartic exhaustion like that, it was a "rolling bottom", it occurred after a very long period of declining volume and declining enthusiasm for equities, surely not what we are seeing here and now. If 1330 is not breached during April, then I will have to revisit these assumptions, right now, though, I still have a breach of 1330 sometime this month, and if that happens, a very rapid run to the support in the 1253/63 area could ensue.
I have a quintet of stocks (COCO, BSTE, COO, ECL and IGT) that serve as kind of a litmus to internal strength, one of them, BSTE made an impressive break out so far without turning back. Two weeks ago, IGT made such a break but gave most of it up. Typically on moves that are sustainable at least three of these breakout and stay up front. So for now, I am going to stick with the majority of indicators that are still pointing to more pain for us the bulls. If you look at the Dow you will see the same only MMM has printed a new high today (PG may not be far behind) and we are almost three weeks in the move from the March lows, not a sign of a lot of internal strength, IMTO.
Zeev
