Investors should not be fooled by the strong performance of stocks last week. Fundamentals have not changed and still present major headwinds to a market recovery.
Oil ended the week at $29.64 per barrel (BTI crude), which is still too low to save struggling fracking companies from the junk heap. The junk bond market backed away from 10% yields but is still a disaster zone. And major hedge funds are still nursing double digit losses.
What we saw was a classic short-covering rally inside a bear market that has further to run. Readers should not let their guards down and let themselves get fooled into diving back into dangerous waters.