ARE we there yet?
Maybe it's the rare burst of midwinter sun in an otherwise agonisingly cold and bleak year, but the mood suddenly has shifted, kindling hopes that our market may well have bottomed.
There is ample reason to believe that may well be the case. But there are just as many reasons not to become too hopeful that it will fire up any time too soon, that the wild mood swings are likely to continue for at least the rest of this calendar year and that growth is still an elusive dream.
It was instructive to examine the driving forces behind yesterday's local rally and the weekend surge on global markets. Most reports quoted "better than expected US employment numbers" along with a more optimistic outlook for the eurozone.
While there was stronger-than-expected growth in new American jobs, most analysts overlooked the fact that US unemployment actually rose, even if by just a touch. That suggests traders are beginning to seek out positives and are becoming increasingly nervous about short-selling as a sure-fire way to turn a buck.
That change will provide a heartening backdrop to this morning's Reserve Bank monthly board meeting. The board is in a holding pattern, awaiting signs of the impact of its recent interest rate cuts.
Of more significance is the full-year profit reporting season that moves into full swing this week with earnings from Telstra, News and Crown, among others. The general consensus is that earnings this year among the top 200 companies will be 0.06 per cent lower than last year. While that overall figure suggests there has been next to no change, it masks a 17 per cent decline in resources earnings.
While any company that undershoots its earnings estimates this year undoubtedly will be sentenced to the doghouse, the real focus for investors will be on the outlook for the year ahead, which almost universally is being viewed as a turning point.
At this stage, however, it would appear that most analysts are getting slightly ahead of themselves with their earnings projections for the financial year that has just begun.
Overall earnings are forecast to grow by 10.3 per cent in the year ahead. But if there is a continuation of the volatile concoction of poor consumer sentiment, a strong currency and international uncertainty, which has dominated our market for more than three years, that target would appear ambitious.
A strong component of that profit lift in the year ahead centres on a renewed growth path for our resources companies.
It is worth remembering that raw materials prices dropped almost 30 per cent in the financial year just ended. No one saw that coming. Or perhaps they simply refused to confront the inevitable, that a meltdown in Europe would affect the rest of the world, China included.
Until a few years ago, when the prices of iron ore and coal were negotiated annually, there was far more certainty attached to the earnings of our big miners.
It was an inefficient, overly bureaucratic and at times hostile process that created ill-feeling between all involved.
And as supply shortages sent the prices of key steel-making ingredients to stratospheric levels, our miners were keen to dismantle the annual negotiations. Why wait a year to enjoy a price hike when you can book profits now on an open market?
As prices come off the boil, however, the opposite is true. It is the buyers, predominantly Chinese steel mills, that now will be able to take immediate advantage of softer demand and lower prices.
Under the old system, the miners would have been temporarily insulated from the weaker market situation with higher prices locked in.
For months now, Australian investors have hunted out yield stocks like bargain hunters at an op shop. Those old '70s-style bell-bottoms? It is a bit of a stretch to imagine they will ever make the kind of fashion statement they once did, but there are plenty of former cast-offs that suddenly have been in hot demand.
Telstra, once the great unloved, the company with no future, the monopoly forced to relinquish its wholesale backbone, has become something of a celebrity with all those billions in the kitty courtesy of its NBN deal.
With a yield of about 7 per cent, it's certainly offering a better deal than anything you could get at the bank. And that is after some fairly spectacular capital gains.
As a further testament to the wisdom of counter-cyclical investment, the Real Estate Investment Trusts those over-geared and over-loved vehicles of the great boom that crashed and suffered third-degree burns have been standout performers of late.
It may have taken the best part of four years to see a recovery, and it is a recovery from an exceptionally low base after their wondrous fall from grace in 2008, but it is a recovery nevertheless.
Even so, many of them are still trading below their book value. Their shares are valued at less than their assets, and with repaired balance sheets it is an open secret that some will be pursuing share buybacks.
Europe, however, still casts a pall over global markets. If any optimism can be gleaned from recent events, it is that the eurozone has managed to somehow hold together against all odds and despite its own capacity for self-immolation.
European Central Bank president Mario Draghi's declaration that the bank will do "whatever it takes" to maintain the euro was a significant shift in attitude and a new determination to succeed.
Unfortunately, global markets continue to lust for further stimulus, from both Europe and US authorities, rather than underlying recovery in developed world economies.
That creates a longer-term problem. Are we becoming addicted to the medication rather than seeking a genuine cure?