Why this bull may have legs

Stocks have been crushed over the past year and half, leaving many of us to lick our wounds as the highly-touted and closely-followed Dow Jones Industrial Average of 30 stocks gave up more than 50% from its late 2007 peak to the recent low 6,440 in early March.

But a recovery in excess of 35% in just three months has been nothing short of astounding as investors begin to anticipate tangible signs of an economic recovery.

But is the rally for real or will we re-test the lows? I spotted this article, New bull run called by tracker of Dow's historical trends, on Marketwatch.com that suggests what we are seeing is the real thing. The surge over the past three months

"is second only to the post-Depression bull run, with odds favoring a further rise during the next three months, one strategist said. 'I say this with the utmost confidence and my fingers tightly crossed: This is the start of a new bull run,' said Hugh Johnson, chairman of Johnson Illington Advisors"

Going back to 1900, Johnson counts 18 surges of 20% or more in any given quarter. I must point out that according to The Economist, there were three rallies in the great bear market of the early 1930s that produced 20% gains that were then followed by new lows.

But I feel that Kate Gibson's piece expresses the growing optimism that the worst recession in over two generations will soon come to an end.

Today's employment report and the smaller-than-expected job loss is signaling a turnaround is near. See Nonfarm payrolls drop 345,000, Unemployment rises to 9.4% and Nonfarm payrolls vs. the unemployment rate.