Reading the Market Bounce

From the FT:

Are investors risk-seeking or becoming more risk-averse? The recent rally in equity markets suggests the former; the fall in Treasury bond yields and the widening of credit spreads suggests the latter.

I am not sure I would read too much into the equity bounce. Stocks got held underwater for several weeks before staging this rally. Markets never move in a straight line and it is really the new highs and lows that have meaning.

Certainly with the mixed economic data it doesn't hurt to keep an open mind but I am not sure a rally reflects risk-seeking so much as relief.

If Toll Brothers can make new highs I would take it as a sign that any bear bets have to wait.