……….All this stuff about bear rallies may or may not be true…….but that’s NOT what you said……..you said:

” You can kind of see that reflected in the stock market. It is rising, as the severe recession eases somewhat. But it’s only rising gradually. Investors clearly don’t see boom times ahead, just a lessening of the terrible conditions we’ve had.”

………See no mention of “bear rallies” but the very definite statement that a 50% rise in 6 months is “gradual” which I’m afraid is total bs…………Frankly your dissertation above just confirms that alas you know sfa about economics or business……for this to turn into a bear rally you would have to be predicting that the market is likely to lose at least half that gain during the next year…..if that’s what you believe by all means go and bet your house on it by shorting the market………er…I wouldn’t if I were you unless you want to be sleeping in the gutter.

Look at the bear market rallies in the early 1970s under Nixon, and in the 2000s under Bush 41.

http://stockcharts.com/charts/historical/spx1960.html

Starting in 1970, at the start of the Nixon Administration, the stock market rallied 60% in six months. But we were in long-term bear market conditions, and the rally fizzled. By 1974, the stock market was LOWER than it had been in 1970.

After the 2002 bear market low following the 9-11 attacks, the stock market rallied some 80%, reaching a high in 2007. But you know what happened after that. By the end of 2008, the stock market was LOWER than it had been in 2002!

When the long-term outlook is uncertain or poor, even huge market rallies eventually fizzle. That’s one reason why I assert that it’s impossible for Technical Analysis to tell the difference between the start of a bear market rally and the start of a true long-term bear market. They look identical (and bear market rallies can sucker in lots of amateur investors). The only way to know for sure is to look at economic fundamentals to see if the rally can be sustained.

Fortunately, in 2003, I had the good sense to invest in precious metals, base metals, and natural resources, as I observed the geopolitical chaos of the War on Terror. I have tripled my money, whereas the S&P 500 Stock Index is no higher today than it was in 1998.

Going forward, my next move will be to bet on rising interest rates by shorting the long bond.
As you know, interest rates have been VERY low as the Fed tries to stimulate the economy. But as it recovers, albeit modestly, the huge expansion of the money supply will be inflationary–and the Fed will be forced to raise interest rates. And by shorting the long bond, I will do well–because I very much doubt that the Fed will raise interest rates enough to REALLY dampen inflationary expectations. Just like Arthur Burns.

Finally:
I continue to look past your personal attacks on me, which have been nonstop since you got here. I know how left-wingers like you operate. You revel in the sewer and the gutter. I refuse to be dragged into the sewer with you.

“Bill Dudley, president of the NY Federal Reserve, has forecast a “moderate” recovery in 2010, with unemployment declining modestly.”

…….So he agrees with me

“I had a credit card canceled on me for no good reason),

………You must be a credit risk buddy

” But it’s only rising gradually. ”

…….50% in six months…..that’s gradual?…….Sinz, trust me, you know sfa about business and economics….stick to healthcare where you do have a fair grasp of the subject I will admit including a lot of detail which I respect….because as with most things, the devil is in the details

Bill Dudley, president of the NY Federal Reserve, has forecast a “moderate” recovery in 2010, with unemployment declining modestly.

A major factor restraining the pace of recovery, he says, is the “negative wealth effect” caused by Americans looking at the value of their homes (now often worth less than their mortgages), and the collapse of their 401(k) plans. They feel poorer–so they cut back and spend less. And in the U.S. economy, consumer spending accounts for 70% of all spending.

Plus, despite the TARP and whatnot, credit is till tough (I had a credit card canceled on me for no good reason), and banks are still reluctant to lend. This can be a problem for commercial properties whose mortgages have matured and which now need additional financing to keep going.

http://www.newyorkfed.org/newsevents/speeches/2009/dud091005.html

You can kind of see that reflected in the stock market. It is rising, as the severe recession eases somewhat. But it’s only rising gradually. Investors clearly don’t see boom times ahead, just a lessening of the terrible conditions we’ve had.