There’s no question that the past year-and-a-half has been disastrous for investors. Since last March, the S&P 500 has lost nearly a quarter of its values, and many are still too scared to put their money back in the market in the market. But according to some of the best investors in the world, now is exactly when you should turn your eye to stocks…

Is the rally over? Not at all! The world’s bankers say the economy is recovering. Investors believe them; they’re bidding up stocks.

Where are we now? Still in the Twilight Zone economy as far as we’re concerned. US stocks ended strongly on Friday. And they’re set to rise again today if Europe’s strong morning performance is anything to go by. Commodities are up too. Nymex crude oil futures are at $74.24 a barrel at writing. Gold is trading at $953.50 an ounce – not far off Friday’s one-week high.

Equities “are now barely through an 18-year secular bear market,” says our favorite underground analyst David Rosenberg. As illustrated by the nearby chart, US stocks have a historical tendency to move in 18-year cycles.

Bias to sell dollars fades away…  Trading in yesterday’s clothes…   More thoughts on China…   Shadow Inventory…
And Now… Today’s Pfennig!

The dollar was slightly higher on Monday, supported as investors shied away from taking new positions before key U.S. jobs data due this week, while gains were kept in check as rising stocks stoked slight demand for risk.

Markets slip again on weak housing data, economic outlook, Greenspan speaks: what the great contrarian indicator had to say this time, and plenty more…

Is the U.S. stock market rally for real? Or have stock prices gotten a little ahead of themselves?  After more than eight weeks in rally mode, it certainly appears that stock prices are outpacing economic reality.

Despite the worry of a flu pandemic, a unexpectedly large contraction in US GDP and a recent prediction by the IMF that US banks’ loan losses would top $2.7 trillion, the world, as Justice Litle puts it in Taipan Daily, “is pounding the table for a V-shaped recovery.”

Gold isn’t going to $2,000 an ounce. Before you gag on your coffee or suffer chest pains, allow me to explain. We’re about eight years into the bull market, and gold has breached the $1,000 level twice and has spent weeks trading above the old high of $850.