Market recovery or a bull trap

We already had 3 consecutive days of market recovery. At least this helps ease the burden of depression on the stock market. Many investors are opening trading acc at securities companies, expecting the market would keep going up on a permanent basis. But they should be very careful as there is not yet any solid foundation for a longterm rebounce.

The market recovers when the macroeconomy is still unstable with high interest rate, volatile exchange rate and the pressing inflation. Not many, even the experts, could understand why amid these concerns, the market has still made slight increase.

Institutional investors are taking into consideration what factors are really standing behind the recent increase. And they are nervous of a coming bull trap.

There are a few reasons worth noticing:
(1) we are heading into the 3rd quarter of the year which is always "notorious" as "the worst performing period of the year" for almost every companies.
(2) the demand force is not strong, therefore affecting the inflows of capital to support the market
(3) there is a decrease in the supply factor
(4) the net trading volume by foreign investors is negative
(5) the external factors supporting a permanent increase is still "somewhere on earth".

Personally I think we will not see a strong recovery of the market until year 2009 when we can make sure the Gov efforts to tackle inflation provide some efficiency and the business sector does not suffer casualties from the volatile operating environments.

For detailed look at this link.
market recovery or a bull trap awaiting ?