It took a run on the banks alert After IndyMac, Who's Next? to trigger the wake-up call; suddenly, after the feds reassurance, sentiments switched, cash started pouring into the stock market.
From the surface It looks as if it may be the turning point, however the stock market will not in my opinion go back to Bull territory until we get some good data from the housing market, Thursday July 24 Existing Home Sales, and Friday July 25 New Home Sales may provide an insight, surely fear of bank liquidity problems will create short term safe haven in the stock market, this is what we witnessed late last week.
A full fledged recovery will happen once the following three conditions are met:
1- Fear that banks will continue to have liquidity problems (already established).
2- Belief that the stock market will stay in bear territory and the bottom is yet to be reached (yet to happen).
3- Belief that the commodity boom is over and that commodity prices have settled into range (yet to happen).
The above conditions once met will create safe haven in properties, then the property and the stock markets would have bottomed and we will be back in Bull territory.
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