Is this rally over? I am really cautious now .

I was reading an article from barrons, which I feel is very important to share with my readers.

The U.S. dollar index peaked at the same time the stock market bottomed in March. Since then, the greenback is down 13%, which happens to approximate the year-to-date gain in stocks, though of course the equity market is up 50% since the March low. Nearly every bit of the year's upside has been logged on days when the dollar was weaker. In addition, the Dow Jones Global Ex-U.S. index is up about double the S&P 500's gain, and only five of two dozen national markets, all in Old Europe, have done worse than the U.S. in dollar terms.

These inter-asset relationships probably will change, or at least become less reliable on a daily basis, but it's hard to say when or why. For what it's worth, perhaps the most consensus-bucking opinion on Wall Street is that the dollar could firm or strengthen without obliterating stocks.

Whether this rebound is now fully priced in is the subject of a valid argument, with the equity market no longer appearing cheap. But it's tough to dispute that the profit spring is quite compressed.

The market is at an interesting juncture now -- more so than most times, even.

A year ago, the most resolute bears were calling for the S&P to sink to 1000. Six months ago, the boldest bulls thought we could get up to 1000. We're there.



It shows this rally to have about equaled the duration and magnitude of the doomed rebound off the 1929 lows, and to have outpaced the other post-bear recoveries of the past century.

Another chart worth looking at is how far we are



This chart looks not at the possible amount markets can fall, but rather, how much further the rally can run. It compares 3 prior bottoms with the current one.

Some comments from on above chart :
This rally at this stage is way ahead of all other “real” market recoveries and is most like ‘29-30, thus we can’t plausibly expect it to deliver more upside soon and the market probably needs to correct hard.

I don’t view this as any raging contra signal, just another indication that sentiment remains more cautious than one might expect after a 50% ramp.