The market continues to focus on a handful of economic indicators while turning a deaf ear to a plethora of positive earnings announcements. The muted reaction to earnings was predictable, especially when you consider that stocks were already flying 60% higher than their March lows. After better-than-anticipated releases in each of the prior two quarters, Wall Street is doing a terrific job of "anticipating" a third consecutive quarter of better news. Hence, robust earnings are not necessarily translating into a vigorous market rally.

I remain optimistic about the economic recovery over the next year. In my opinion, equity analysts continue to underestimate the potential improvement in earnings during the year ahead. The market and portfolio managers, however, are more bullish, pricing in more serious improvements than analysts. I think the market still has plenty of potential upside, especially if job creation or consumer spending start to show some long-awaited signs of life.   More 

"The recession is very likely over."--Fed Chairman Ben Bernanke on Sept. 15.

What does the Fed chairman's statement mean for stocks, if indeed the worst recession since 1929 is over? We don't know for sure. We can, however, let history give us some perspective.

In this spirit, I looked at the one-year and three-year returns of the S&P 500 Index coming out of a recession for the nine recessions since 1950.

End of Recession (month)	S&P 500 1-Year Return (%)	S&P 500 3-Year Return (%)
May 1954	23	54
April 1959	31	48
February 1961	8	20
November 1970	2	18
March 1975	20	4
July 1980	7	37
November 1982	16	35
March 1991	10	24
November 2001	-23	-2
Average	10	26
Standard Deviation	15	19

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When reading over many market commentary pieces lately, I'm struck by the lack of consensus about both the fundamental trajectory of the economy and the sustainability of 2009's equity market rally. Two of the positions contending in this debate were put forward in a pair of op-ed articles in Tuesday's Financial Times.   More 

Technical analysts are always on the lookout for chart patterns and indicators that can provide insight on a market's ultimate direction.

When technical analysts say things like, "If it does this, then this," they are making a tactical statement. I'll use crude oil as an example.

The trend in crude has moved decidedly to the positive side, so long positions are, on balance, likely to outperform. In the event that prices move lower, it's very good to know where support is likely to materialize so that you can quantify how much of a lower price you can stomach. So if I'm trading crude today, I'm going to be buying crude around the $65.25 level (current support) and selling near $74 unless I want to assume more risk and try for a higher price (based on my fundamental view). If prices dip below $65, I'm out of the long trade and can either short futures down to $58 or use that as an entry point for another long position.

This is why I think you can't use fundamentals or technicals in isolation, because the fundamentals provide a good sense of overall value and technical charts show how the price action is likely to play out.   More 

I have been thinking about a few things the past few days and would love your thoughts on them:

1. It seems to me that no one is happy right now with their investments. Those that sold are clearly unhappy, and those that didn't seem to be worried about October. Is it just me or is this happening everywhere?

2. Has the popular press decided that it is time to buy? Ken Fisher thinks we just need to borrow more to get back on the yellow brick road. Even the ever cautious James Grant has gone from bear to bull in public.

How come there were NO articles like these in late 2008 and early 2009. During those dark days, I would spend hours looking for something positive...nothing but apocalypse. Now, AFTER a 50% run, it is time to buy again?   More