This one hundred plus day rally for the index markets has seen the DJIA rally over 43%, with the SP500 and NQ100 exceeding over 50% gains. The particular migration back to 10,000 DJIA will continue with enough downside bend and turn activity scary enough to make many stop looking up. But this current rally is one of investors and traders returning to purchases based in part on perceptions of bargain values, short term opportunity, and finally, top quality risk investments. The first two seem to fit the stock indexes, while the latter is a bit tough on the return side since few AAA short term investments exist that do not return near zero.
Finding bargain values in stocks is a game filled with few real reliable measures. Those actually getting paid to analyze stocks are constantly fooled by gamed data, while the upside bias of business news coverage remains a function for the simplest of minds. Buying large percentage breaks in price does work, but it usually remains a short term play. The determination of real value will have to be played out in the balance of this trading year as to whether low prices are really value opportunities. I suspect many will be disappointed and will discover that value is the price you sell at below your purchase price.
