When you have low volume, almost anything can happen in the stock market:
There is a very interesting chart
at Hussman Funds which plots the various post-recession recoveries. Guess what? The action we've witnessed this year is quite the exception. Not only has the run-up been extraordinary, so has the volume. From the report:
It's clear that this year's rally is an extreme outlier in the dataset, with above-average returns and a continued contraction in volume from the levels of trading in March.
Calling it an "extreme outlier" is apt.
The report also notes the role played by "Phoenix stocks" like Fannie Mae, Freddie Mac, Citigroup, AIG, and Bank of America who are responsible for a lot of the (already low) trading action. Take those out and the volume is even lower, which makes you wonder what's going on in Wall Street.
What's going on in Wall Street? The public is not participating. It's strictly the pros playing/gaming the market with momentum as a huge factor. But momentum eventually runs dry, so expect some sort of reversal in the months ahead.
Wanna bet that the TARP money is being used by the government owned banks to continually buy enough stock off the market to prop up the stock market?
I always assumed that a government takeover of the private sector would involve seizing companies. It turns out that the preferred approach is to sell treasury bonds to foreign countries to raise funds to buy out the private sector.
Without hardly anyone noticing, the government has acquired a majority of the auto industry and banking sectors, and is set its next goal on acquiring the energy and health care sectors.