Recent Market Rally

Has the recent Market Rally been justified ....?

Well, let's look at how it all happened:

Last Wednesday, the Beige Book Day, the market rallied (the Dow) 187 points, basically on no fresh news except a hint from the Fed that the inflation seemed to be within the expected range!

The following day came the results for the PPI which itself was above the forecast of +0.6% BUT the Core PPI was as expected and yet again the market reacted positively to these numbers and pushed the Main US Index, the Dow higher by another 71 points.

Friday, the market looked to yet another inflationary gauge the CPI -- the CPI itself was slightly higher than the estimated figure of +0.6% BUT the Core CPI emulated the previous day's C.PPI by matching the market's estimates at +0.6% AND YET AGAIN the market astonishingly rallied for the 3rd day on the same fundamentals by another 86 points as far as the Dow was concerned.

The extent of the 3-day rise was such that even the most optimistic of the bulls could not have thought they had been given another Christmas day in a short space of time, specially that early in the week some of the bulls were about to think that their run may have come to a halt when the US market had a very bad day on the Tuesday --- Even the slight chance that the bears may have thought they may have had in the sense of Friday having been the Options Expiry day, hence the possible volatilities, did not materialise in the sense of any opportunities for some consolations and markets finished the week on a very strong footing.