With five days of upward movement, the market has recovered from its recent "crash, meltdown, panic or whatever," according to Irving Katz, director of research for Thomas Green & Associates / San Diego Securities Inc.
"The price of a stock is thought to represent the market's estimate of the present, discounted value of a company's future earnings," Katz said. "If this is true, the present value of America's future prosperity has been revalued down by several hundred billions of dollars."
Some of the oversold, over-the-counter stocks, which have been badly battered to unrealistic prices during recent weeks, have bounced back to some more-realistic values, Katz said.
"The OTC market still suffers from larger-than-normal spreads--the difference between the price that dealers are offering to sell and willing to buy--which shows there is less liquidity in a market where OTC dealers have absorbed extraordinary losses on their inventory positions," Katz said.