Are we out of the woods?

After the markets 'corrected' in Feb, they have since rallied. In Feb, the ASX 200 fell off from a high of 6044 points, to 5653. Now, its back up to 5975 - a 1-month high.

Is this rally sustainable? Yesterday's data on new home sales for February in the US (down 3.9% to a 7 year low), on top of the sub-prime problem, indicates that the crisis in the housing market may not be close to the bottom yet. Indeed, Roubini takes this figure as further evidence that supports his call of a hard-landing and recession. Dan, however, thinks otherwise.

Contrast this with the stats in Australia, where home sales have jumped. With the A$ rising to 10 year highs, due to expected higher interest rates, that's another huge vote of confidence in the underlying China/minerals export story. However, we also have the collapse of Fincorp - which has gone largely unreported by the media.

I think the Aussie stock market is due to decouple from movements in the US markets... but what do I know?