What's in store for the 4th Quarter of the 4th year during the Great Recession

There are many theories about the direction of the stock market for the rest of the year. General economy is not looking up, however. Housing is bottoming, or so the experts think. There are still huge inventories, something like a 11-month supply of new homes. Existing home values are trending higher compared to 6 months ago. Consumer confidence may be building, but primarily this is due to false optimism about the US Presidential election outcome. No idea what the connection is!

A reputed analyst suggested if the stock market is at its highest now since late 2007, inspite of the corporates barely able to squeeze any top end growth, he thinks the slightest 4th quarter good news can catapult the markets higher. This seems ridiculous and may be short lived. Remember we have not done anything for the fiscal cliff that is right around the corner. Its a daunting task and the can is getting kicked down the road. Added to this, unemployment signs are not encouraging, entitlements are getting insolvent. This stock market is in a bubble right now, in my view. No doubt, money can still be made in short term calculated bets in stocks! I expect a rally and a bust in the next 3 months. Let us see!

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