The current stock market rally has been decried as transitory by various skeptics the whole way up. And when any market comes this far this fast, it is good to be skeptical. The S&P 500 through yesterday (Jan 7) was up 69% off of it's Mar 9, 09 lows.
One of the characteristics of sustainable rallies, however, is strength in other indicators. The VIX has seen investor anxiety fall off from all time highs back to historically average levels.
A classic internal indicator New Highs/New Lows has also seen a big turn from an avalanch of new lows during the height of the crisis to a steady stream of new highs during the recent rally.
Most importantly, however, there are a good range of companies show a return to fundamental growth and stregth to go along with the stock price moves. Everthing from bellweather names like Google and 3M down to niche companies like Under Armour.
Things could turn at any time, and it still may be the case that the market has overshot on the upside, but with a solid foundation in place a return to the depths feels unlikely.
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