Optimism has replaced fear and 2010 will test sustainability of recovery

The first few trading sessions of 2009 were surprisingly bullish continuing the momentum of a late December rally.

It took just a few days for reality to bite and when it did, the market careered almost ceaselessly towards its March low, winding the clock back to the same level as 1997. Against a deteriorating economic backdrop, the judgement investors had to make was how bad the crisis would get. Many analysts were drawing convincing comparisons with the Great Depression, while more moderate voices, mine included, suggested the US was facing a recession, a “less-worse” outcome. Thankfully, the latter scenario turned out to be reality and after the final terrifying slide in February the stock mark...