Courtesy of Arvindh Rao, Bank of America/Merrill Lynch Chief Economist David Rosenberg has written what I believe to be an amazingly forward and honest article on the current state of the market. He cautions that the surge in the stock market from the March 9 lows, while possibly the cycle low for this bear market, may not imply the start of a new bull market.

History teaches us that many, many rallies such as the one we have witnessed recently have occurred, each one serving mostly to drive the shorts out of the market than provide returns for longs. This seems to be the period in which we build a new base for the next bull market, but we are by no means there yet.

Wisdom says, “follow the money,” and the big-money players have not put a dollar into equities yet. Fixed income continues to outperform the stock market and until new fundamental lows (the contraction of market P/E ratios, multi-quarter profits for conglomerates, and the stabilizing of unemployment and asset deflation) are set.

I think everyone should take two minutes to read the article below before deciding that it is time to start buying stocks. If the market declines from here out, as is quite probable when you see a 30% rally in two months, a small investor can become permanently disillusioned and lose a lot of money watching his nest egg once again decline in value.

Zero Hedge: Shooting The Shoots