Lower prices in early March were indicative of poor health in the markets.   And during the “recovery” to DOW 10000, higher prices are “proof” that asset prices are healing, if not healthy.   Right?   Isn’t that the common wisdom that floats around the media and markets?

Personally, I think associating prices to conditions is a ridiculous and dangerously ignorant concept.

By this logic, house prices and the housing market was at its healthiest on or about December 2005!

If today’s high stock prices are a sign of good health, then were stocks the healthiest they have ever been on October 9, 2007?  Where they healthy in April of 2000?  Were they healthy in September of 1929?  If the S&P suddenly jumped 500 points in the next week, would you be convinced that we immortally healthy?

And of course, the people that love to throw around the idea that higher prices mean healthier assets or markets try to only apply this notion to the asset classes they want to hype and spin.  For example, I doubt you’d agree that higher prices equal health if you were talking about oil.