Relief Rally Continues...

The relief rally continues to the relieve (pun intended) of many investors who jumped in a few days ago as the Dow went for the second scenario I mentioned yesterday. Yes, this relief rally could now go as high as 7500 points before the bear trend resumes. So why am I so adamant about this "rally" being a bull trap? First of all, one high profile analyst said today over national wire that "How all this turned around in a week, I don't know, But it's certainly a better outlook than how it looked two weeks ago.". If something is happening when you don't know why, its probably not as real as you think it is. There just isn't any real fundamentals to drive a turn around right now. The most reliable indicator for a turn around, which is peak unemployment, doesn't seem to have happened yet. Telling the banks that they can now start pricing "assets" the way they had been (which was one of those things that led to this crisis) isn't the way to solve anything. Restoring the uptick rule may help the stock market but with those professional short sellers making a heap of money right now, who will drive such a change? I remain doubtful. On the technical front, this pullback still has all the characteristics of a relief rally. A nice pull up of a few days after a steep decline before hitting a strong resistance level such as the 30MA and correcting back down, resuming the bear trend. Yes, no trends go straight up or down. All of them are intersected with such pullups or retreats, so, I am not so hopeful yet.