Success in making money in the stock market depends on handling prices - and you had better know what they mean. 'Price is what the greater fool is willing to pay.' Price is a momentary consensus of value of ALL market participants, expressed in action.

Price is a psychological event - a momentary balance of opinion between bulls and bears. Prices are created by masses of traders and investors - buyers, sellers and undecided people.

Prices reflect the actions of all traders and investors. Fundamentalists and technicians, insiders and hunch players, smart money and dumb money, everybody. Price and volume reflect every trade that you and millions of other people make. Market prices are a reflection of human emotion, not company value or earnings potential or anything even related to true value. The value is fear and greed and hope and despair. If enough people believe and act on that belief then you will see those magic numbers appear in every time frame and every market. 'Self-fulfilling' prophecies that make money are better than fundaments that do not.

In other words, some people are undoubtedly basing trades on these support and resistance levels, so even if you think doing so is unwise, it is even less wise to pretend it is not happening. Perhaps history does not repeat itself exactly but sometimes ignorance thereof does.

Today's macro themes are similar to those of a decade ago. After the bubble burst in Japan at the end of the 1980s, the Bank of Japan flooded the world with liquidity. And as a result, we experienced a classical boom and Asian markets became the world's best performing asset class. However, a couple of years later this excess liquidity led to the Asian Crisis.

This time around it is Alan Greenspan and the US Fed that are turning on the tap. President Bush recognises that to win the US presidential election of 2004, he must stimulate the economy at all costs.

The US stock market is going up (temporarily), the economy is get better (temporarily), people will have more money in their pockets (temporarily) and everything will be okay (temporarily).

But just as the Asian Crisis was the price we had to pay for this excess liquidity then, the aftermath of this 'Bush Push' will be a bleak recession.

For the time being momentum rules. Thailand this year is the best performing Asian equity market, rising 72 per cent and the Hang Seng Index is up 27 per cent since January. Certain fundamental analysts now say there is a degree of 'unjustified' euphoria, especially as the best-performing stocks tend to be the wild cards while dividend paying stocks have underperformed.

Have the markets rallied too far, too fast or is this only the beginning to new major cyclical bull market? A lot of people who comment and or advise on financial markets actually do not put their own money on the line. The Spanish sum it up nicely in a proverb: 'It is not the same to talk of bulls as being in the bullring'. Fundamental analysis creates what might be called a 'reality gap' between what should be and what is. The past is fixed and easy to analyse. The future is fluid and uncertain. You have to base your decisions on probabilities in an atmosphere of uncertainty.

For the time being the charts and risk/reward ratios clearly favour stocks. And in the final analysis, fortune does favour the brave.

Michael Preiss is the chief investment strategist for CFC Securities