Is Anyone Else Skittish About Markets Lately?

FinancialSpiltMilk submits:

Is anyone out there just a bit skittish?? I ask as I am seeing a lot of press, yes even mainstream press, about how far the market has rebounded so fast and how the P/E on the S&P is at its highest level in half a decade. Main stream press is wondering out loud whether this rally can last, whether this is a V shaped recovery, a U shaped recovery or a double-dip recession. The Wall Street Journal also carried a piece this week discussing how the markets seem to traditionally have doldrums in the fall, roughly late August through the end of October, with September being quite the culprit. Reading all this, and seeing the markets reaction to a worse than expected Consumer Sentiment number today, I have to think people are a bit skittish, as in walking on egg shells, as in on the edge of their seat, as in worried. Sure, no one wants to miss a V shaped recovery, but no one wants to be there if the V is simply a Bear rally destined for a massive plunge in the fall. If you read my blog, you know where I stand.

And if you are not skittish yet, I highly recommend reading this short post at Calculated Risk. Some very nice charts show just how far we have come and how we are in almost identical alignment with a bounce during the Great Depression. Graham Summers at Seeking Alpha noted the other day that the alignment to that bounce has a .8 correlation, which is very high. I am not saying we will retrace the Great Depression, but I am a bit skittish.

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