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Strong start for stocks, but what's changed?

Saturday, January 21, 2012

(Reuters) - Stocks rising, bulls rampant are motifs you might pick if designing a coat of arms for Wall Street at the moment. But the motto should read: Caveat emptor. Yes, buyer beware.

The S&P 500, a broad measure of the market valuation of the biggest U.S. publicly traded companies, is up 20 percent from its October closing low. It keeps climbing on a mixed bag of fourth-quarter earnings, improving U.S. economic data, and easing credit conditions in Europe. It now stands at its highest level since early last August.

We have already seen what is probably the first upgrade of a target level for the index this year courtesy of Credit Suisse.

The CBOE Volatility Index, or VIX .VIX, a measure of what investors are paying to protect themselves against the risk of losses, is at its lowest level in seven months.

So it raises the question: Is this another Jackson Hole moment for risk assets?

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