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While Bill's note of caution is always valuable, I'm not sure I get what the excitement is all about - as yet. According to Schwab's monthly activity report :

- Daily average share volume in April was below that of March
- The highest volume this year was in Jan - and that was 25% lower than the 12 month high!

Sure, Schwab's April volume was up 5% over March - but again that was below the 12 month highs.

So - where's the fire? None of the above indicates fools 'rushing in', as Bill puts it.

What's interesting is that now people are suddenly excited about the stock market, now that it is suddenly rocketing upward once again. Somehow, the stock market feels healthier than it did back in March. Which is funny because by my reckoning the market, as measured by the S&P 500, is nearly 20% more expensive than it was when folks were so down. I guess that whatever anyone says about the validity of bull or bear markets, it is certainly contagious.

It's all very well to talk about valuations - but which was the last market recovery driven by valuations? How many average Joe investors have the foggiest notion of what a valuation is or even how to arrive at one? What this market needs is better psychology - not better valuations. Let's get it back on its feet the good old fashioned human way, then let's talk technicalities.

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