is the bear market rally over?, page-3

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    From CNN Money just now:

    Not everyone is sure that a flood of new cash into mutual funds is a necessary component of the rally continuing for even longer. For Bank of America Securities strategist Tom McManus it's enough that the huge outflows of the summer -- a record $52.61 billion exited stock funds in July -- have been replaced in recent weeks by incremental inflows.

    "The market doesn't need money to go up," he said. "The only thing that has to happen is the pace of bad news has to slow."

    McManus thinks that a lot of people have made investment decisions based the opinion that things are going to be worse than they will be. As it unfolds that the environment isn't quite as lousy as they expected, stocks will keep heading higher.

    The perfect example of how this works, points out Bollinger Capital Management head John Bollinger, is the holiday shopping season. Just a month ago there were people forecasting the worst year in decades. As it's become clear that people are still going to buy presents for their kids, retail stocks have put on a big rally.

    "We're set up for an environment where most of the surprises will be positive, and that will be good for equities," he said. "I think that the rally will continue through at least the first half of next year. Then expectations will be more in line with reality and people will have to reassess."
 
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