Another Impetuous Move?

The Dow has closed at a new record high for the third day in a row, largely due to better than expected earnings reports and higher oil prices. I'm sure consumers will be glad to know that Caterpillar is cutting huge profits and oil is surging up above $63 a barrel.

But all kidding aside, if you look at a one year chart, you will see that the big dip in February has been erased almost as if it wasn't there. What I though would be a wakeup call for investors to show a little restraint has been so quickly forgotten.

I had predicted a correction down to 11,700 before it would turn around. I missed by about 300 points (quite a significant amount). When I posted about "the golden ratio" a couple of weeks ago, I pointed out that if the 61.8% level were to be broken, we could expect a new high in "short order". Well, here we are.

I fear though that this all too fast. I am of the opinion that the February correction was a good thing, but that it didn't temper the market as it should have. We are off and running again. Let's see what happens in May when investors typically "go away."

UPDATE: Great article here by Larry Kudlow about inflationary risks, confirming my belief that the Fed should not, and probably will not lower interest rates. (h/t reality-based educator)