From BSC

There are some important technical aspects developing in the stock market.   Most of the talking heads on brain-wash-ovision, will tell you that we are in a recovery rally.  I beg to differ.  I’ve included some technical analysis which shows exactly why we are in bad shape. Hopefully the notations on the charts are easy enough to understand without much investment experience.  I’ve used the S&P 500 as the data set, since it has been most influenced by the bailout program, as it is comprised of mainly financial stocks.

Fundamentally the rally in the broad stockmarket from early in March is viewed as being the result of a combination of media hype, wishful thinking and short covering, but there may be more to it than that – it would appear that a sizeable proportion of the TARP (Troubled Asset Relief Program) funds not thus far deployed have been used to drive up the stockmarkets in order to create a positive environment for the banks to issue secondary shares and thus raise equity. While this is perfectly understandable, it also means that once the banks have finished selling this stock to the public, or the market is simply exhausted by being soaked in this way, it is likely to go into reverse in a big way.