>Correction in a Bull market? Or beginning of a Bear market?

“When popular opinion is nearly unanimous, contrary thinking tends to be most profitable. The reason is that once the crowd takes a position, it creates a short-term, self-fulfilling prophecy. But when a change occurs, everyone seems to change his mind at once,” wrote Gustave Le Bon in his book “The Crowd.”

For almost fourteen un-interrupted months, stock markets around the globe were climbing higher, recouping $21-trillion of wealth since hitting bottom in March 2009. The global economy was pulling out of its worst recession since the 1930’s, led by locomotives in China, India, and Brazil. On May 4th, a survey taken by JP-Morgan showed that global manufacturing expanded at its fastest pace in six-years in April, as output and new orders surged to new multi-year highs.

In the United States, factory activity was firing on all cylinders, lifting the Purchasing Manager’s Index (PMI), to a six-year high at 60.4 in April, with employers becoming increasingly confident about hiring. Although manufacturing is not a huge component of the US-economy, the factory industry is still where recessions tend to begin and end. For this reason, the factory PMI is very closely watched, setting the tone for the upcoming month and other key economic indicators.

The US-economy added 570,000-jobs during the first four months of 2010, - a sharp contrast to what occurred a year earlier, when the US-economy was losing more than 700,000-jobs /month
during the depths of the “Great Recession.”

To read the full report: BULL OR BEAR MARKET