Wayne Weddington
D-I-Y Hedge Funds Online

I had excellent open-field instincts when playing football. The term was to “juke” the defense with the head fake. I also had speed (4.49 40-yard dash) but it was the open field head fakes that opened the way.

Similarly, in basketball, the quick crossover dribble can leave the opponent’s body tragically conflicted, not knowing in which direction to defend. The nickname for the crossover dribble, another type of head fake, is the ”ankle breaker” because the defender’s simultaneous movement in opposite directions is likened to breaking his ankles.

The market has rallied magnificently in the last several weeks. Since its March 9 low of 676.83 the SP500 has surged impressively to 907.24, yielding a 34% return in less than two months.

Is it real or is it a head fake?

While there are glimmers of hope for the economy the stock market has gotten ahead of itself in my opinion. Structural problems just do not change so quickly. Every trader would like to be the one who times the market recovery, and it thus becomes a self fulfilling prophecy…. every trend upwards gains more momentum as no one wants to be the one who misses the rally, least of all professional managers who are hanging on to their clients by a thin thread. No one wants to explain why their fund performed less than the market.

Link to original article on CNN

Filed under: 360º Follow • Economy • Wall St.