es m0nday, page-30

Intuition

No I haven't given up hope (being a perma bear) but yes you are right in saying that the general mentality has shifted somewhat from doomsday to being unsure if this is the start of the rally.

Hence why the market NEEDS and WILL rally further, before it tanks. The big question we all have is this, when it DOES tank, will it drop below where everyone got set for a "new bull run"?

I'm not so sure this may eventuate. It would take a fair bit of headline bad news to send it lower than 1040 at this point. The best I can see is a repeat and rinse of what happened last two weeks, where the market looked like it was basing to go higher, only for one jobs report to shoot the rise in the head and send it screaming lower, and all the selling would be done in 24 hours, before everyone realises again, they oversold and started buying back with a vengeance.

It would definately take a few more than just a downgrade of Greece's debt.

The key headline risks to appear to send it below 1040 and into the abyss are, in my opinion;

a) Rudd's resource tax gaining momentum
b) Another Tier 2 European country default risk (Portugal, Ukraine, Spain or Italy)
c) A bad European bond auction
d) US and ECB raising interest rates
e) China raising rates
f) Euro/USD slide
g) North Korea
h) Financial Services Reform in the US being passed
i) New Scandal involving Goldmans, Lehmanns, UBS et al

Any 4 or 5 of these happening inside of two weeks, should be enough to drag the markets lower on derisking. At this point, only (e) seems to be the most probable.