In many ways, the market is like a human being. It has many moods and facets; and a mind of it's own, which is not always rational. Sometimes it will ignore every logical fear and climb to dizzy heights, and sometimes it will work itself into a tizzy over irrational fears and plumb the depths.
The unique thing about this being though is that you cannot argue with it. It is what it is. It talks to you though : if you look at the ticker closely, it tells you many things.
For the last few days, the ticker has been telling you that it wants to go up. It is almost like a boy with a fever who has missed out on a party. All its friends have had a great time, but this feverish kid has been confined to bed. Now it wants to catch up. Our friends are all at new highs, almost across the world, while we have been wrestling with our demons. Now, the market, for right or wrong, is shaking itself out of this stupor.
Over the last few days, it has shown an inclination to react to good news and ignore bad news. Cement stocks did not fall further after the last bit of bad news on import duty cuts. Infosys just had to come up and not deliver a dire guidance - that was good enough for the market to rally, and bank stocks hungrily latched on to the first dip in the Wholesale Price Index (WPI) inflation number. These signs are telltale. They reflect an eagerness on the part of the market to seek higher levels. Whatever one's fundamental view is on the market, it is always important to read these signs.
Joe Cocker's (and the Beatles') classic
With a little help
from my friends springs to mind. Our market will indeed get by with a little help from its friends. The fever is not yet cured. Interest rates, earnings worries and the US economy remain potent ills. Yet morale and sentiment are strange things.
If global markets do hold their current bout of strength , who is to say we will not rally further from here? The boy is not in perfect health yet; fevers may return to haunt him; but a fever-wracked body too can dance to the chorus of his buddies. Maybe not as well as they do, but a little bit for sure.