Markets have taken great comfort in the extraordinary steps being taken by the Federal Reserve and other Central Banks around the world, as well as seemingly unending commitments from Governments to spend whatever sums of capital it takes to revive the global growth economy. The U.S. Federal Reserve is already all in, increasing their balance sheet by more than $2 trillion in just the last month, offering UNLIMITED backstops to all government debt, corporate debt, municipal debt – everything.

And Congress has been busy too, somehow finding $2 trillion in the first volley of emergency stimulus (after running $1 trillion deficits already). Last night’s Senate vote was 96 to 0 in favor of the package – quite a bit of bipartisanship and a recognition that without bold action the economic recovery could take years.

This morning, more than 3 million new claims for unemployment were filed nationally, blowing away the previous weekly record from the min 1980s. Markets are surprisingly UP on the news, which may be a belief that the number couldn’t possible get any worse going forward.

We continue to hold significant defensive positions, but remain flexible. We’ve definitely seen rebounds like this before, and our portfolio management team knows from experience that markets will remain emotionally charged and wholly unpredictable.

Has all of the damage been done? Is the market bottom truly in? Anyone who says they know for sure should not be trusted. If they’re bullish now (after having ridden it all the way down), it wasn’t because of anything more than luck. And if the bulls are wrong, they’re going to lure millions of investors back into the markets only to see lows retested in the coming weeks.

Balance, flexibility, and discipline are key.