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-- Posted Thursday, 16 July 2009 | Digg This Article | | Source: GoldSeek.com
Traders with long experience of bear market rallies inform me that it is usual to see a final spike at the end of a long rally like the one we have had since the lows of March. Is that what we are now seeing in US stocks? This is summertime and trading is very thin but the sudden upward moves in the S&P look like a last hurrah. Goldman Sachs The immediate cause was banking guru Meredith Whitney’s bullish note on Goldman Sachs and then the actual profits from the original masters-of-the-universe. Well, if they can’t coordinate a rally on the back of their own results who can? When market volumes are low just a little buying has an exaggerated impact, and that seems to be what is happening this week. Throw in a nice number like the 20 per cent upturn in Singapore’s GDP and a few brave souls might think the good times are here to stay. The obvious flaw in this argument is that the good times are far from back. And anybody who thinks the kind of structural downturn in trade that has occurred this year will be quickly put right ought to look at the rising US savings rate and ask when the consumer will be coming back to spend. In Asia the Chinese banks are lending at five-times the level of last year and this has helped to offset the loss of one quarter of Chinese exports over the past eight months. But the slump in GDP around the rest of the world has been dramatic. Reality check To say that stock markets have gotten ahead of reality is just to state the blindingly obvious, and older hands have already begun to exit this market. Some hedge funds have been stocking up on gold and silver as a hedge against inflation or further financial chaos this autumn. For it will not take very much to prick the bubble that this amazing rally has become. The winners will surely be those who take their long profits and go short in the market. But it is strange how many talk about doing this versus the number who actually do it.
-- Posted Thursday, 16 July 2009 | Digg This Article | Source: GoldSeek.com
Previous Articles by Peter Cooper
About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in
1999 to complete his first book, a history of the Bovis construction group.
Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.
 Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.
He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.
Order my book online from this link
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The Final Spike of This Bear Market Rally?
