(By Tim - iStockAnalyst Writer) The U.S. stock markets have now risen 7 out of the last 8 trading days. Admittedly, the one down day was a doozy, with the markets dropping about 7% on Monday, 12/1. I have been impressed by the markets resiliency over the last two days, fighting off negative economic numbers, bad company news and mid-day slumps. The market averages have ended each of the last two days posting nice gains. So I am asking myself, is this a bear market rally and further market declines are yet to come or is the market ignoring current bad news a acting as a leading indicator of economic recovery? Let us take a look at recent history:

• Spring-Summer 2006: New home sales and the increase in housing prices reach a peak. Those who warned of the dangers of the housing bubble were ignored.

• July-August 2007: The financial world starts to realize that run up in housing prices had been funded with a large amount of high risk mortgages. These mortgages had been carved into myriads of CDO pools, the rating agencies had given a huge portion of this garbage AA and AAA ratings and the investment bankers had sold trillions of this stuff to every major financial institution in the world.

• December 2007: The recession officially started. No one got the memo.

• First half of 2008: Banks started taking write downs on mortgage backed securities and many faced collapse. Bear Stearns is taken over, Lehman Bros. is allowed to go bankrupt, Bank of America end up owning Countrywide Mortgage and Merrill Lynch. Financial stock collapse. Washington Mutual and Wachovia are eventually taken over by the FDIC.

• First half of 2008: Commodity prices started to sky rocket. Driven by speculation and the China economic engine, the price of everything keeps going up even as it appears the economy is slowing. Consumers, looking at $4.50 gas prices, stop buying new vehicles and nonessential items to conserve cash for higher priced food and gas. Everyone believes prices will continue to increase.

• August 2008: The Chinese government shuts down a major portion of their industrial production to look good pollution wise for the Olympics. Somehow the growth engine fails to restart and commodity prices collapse, the Baltic Dry Index collapses, the world faces global economic slowdown.

• October and November 2008: A bear market hits stock markets around the globe. Companies that need financing cannot get it due to the financial crisis. Companies that produce commodities have lost their growth engine. Companies that sell to consumers have no market. All is lost!

• October 2008 to the Present: The Treasury comes up with a $700 billion plan to help bail out the financial sector. Congress takes a couple of tries, but gets it passed. The Fed cuts interest rates to 1%. We elect a new President who has a chance to make his mark in history if he can fix the economy. The Euro zone starts developing their own financial bailout packages.

The is my recollection of recent economic history and I break it out to point out one main item. The economic troubles we are now experiencing have been a long time coming and the fixes are just starting to be implemented. I have no idea how much of the bail out money has reached the recipients yet, but I would guess not much. Low interest rates will take a while to work their magic and banks need to loosen the purse strings. Congress will do something to help the auto manufacturers if only to help out the economy. President Obama will take office with a plan to get things going. Housing sales (not new homes, that is still months away) have started to rebound in California and the trend will spread.

The 10 previous post WWII recessions have averaged 10.4 months in length. The longest has been 16 months (twice). We are now 12 months into this one according to the National Bureau of Economic Research. This one has had a lot of build up with the housing bubble, housing collapse, financial collapse, commodity bubble, commodity collapse string of events and may set a post war record. But a lot of things could change in the next 4 months, just take a look at recent history. If the options are for this being a bear market rally or the start of a new true bull market, I vote for the latter.