2009-10-29 UPDATE: Updated NASDAQ chart and comments.
Just time quick post. The annotations on the chart are self explanatory. Coming after a 7-month, 73% rally, they represent a yellow flag (caution). See also this weekly chart I posted last month, when we were at this same level, the one I posted yesterday, and the one shown below:
The mother of all moral hazards?
I’ll close with a quote from Mervyn King (Bank of England): “Bank bailouts created the ‘biggest moral hazard in history.'” Indeed!
The GMO Quarterly Letter
“Just Deserts and Markets Being Silly Again” (PDF). Good read.