Barack Obama: no net gains in the markets since his inauguration

All we have been listening to all week is commentators talking about "Green Shoots" emerging in the economy. The US has become obsessed with the term and you can't listen to financial commentary without hearing it mentioned. It's very difficult to find these green shoots but if everyone believes they see them and are buying up the market, don't fight it.

The equity indices are still trending up, with the Dow Jones up almost 30% to date from its March lows.

So we are heading up, fine, but if it's because we believe that things are getting better then think again. Frankly things are getting worse. Don't forget the hard facts here. Unemployment is rising; the US is expecting an increase to 8.9%. GDP figures are getting worse; last week's US annualised figure came in at -6.1% for Q1, while the markets were only expecting -4.7%.

As we write this piece, in the US it has just been announced that the carmaker Chrysler is filing for bankruptcy.

Unemployment and production are the thermometers of an economy, and at the moment the patient is still very sick.

Perhaps the 'green shoots' are a symptom of his delirium. But putting all of this cynicism aside is important here, because you have to listen to the market, no matter how foolish it may sound. And at the moment it's talking about getting higher. The market is a forward-pricing mechanism, so it's pricing in now for a recovery later in the year.

However, all bear markets are characterised by despair followed by misplaced hope, followed by further despair. Right now we appear to be in a misplaced hope stage.

Next week, when the stress test results are announced we expect to see some horrifically high levels of new recapitalisations needed. This is probably the spark which will take this market back a step or two, but whether it can break this strong up-trend remains to be seen. Very short-term traders should pay attention to the stress tests as they should provide plenty of trading opportunities. The financials are still extremely volatile and present excellent opportunities for tuned- in day traders to profit from. Markets always reach higher highs and lower lows than the majority expect them to, and sticking with the trend is generally the safest and most successful strategy to employ.

Last week was a fairly rocky week in the markets. The swine flu caused a certain amount of panic selling early on, but as the week progressed the market began to dismiss the story and jumped straight back in buying. We saw some growth in levels of risk appetite across the board in the second half of the week.

Oil made back the losses which it registered earlier in the week, and gold gave up its gains. We also note the reduction in the contango affecting the oil market. The cost of carrying a contract on oil into the next month is reducing, making it cheaper for longer term traders to hold long positions, and reducing the lure for shorts.

As usual, the US dollar weakened as the equities rallied and confidence increased. If you are a currency trader you should not take your eyes off the equities.

Finally, President Barack Obama registered his 100th day in office last week, and so far his ratings are holding up very well. But how has the market reacted to his 100 days? Well the indices have been down massively but recovered. Overall we've made no net gains from day 1.