The economy is showing signs of stabilizing, we’re seeing exchange traded funds (ETFs) cross their long-term trend lines and consumers are feeling better. But can we trust it? Is the worst really over?

One cause for optimism comes from the recent Beige Book report in which it showed five of 12 district banks around the country reporting that the downturn was moderating, writes David Callaway for MarketWatch.

Though there may be a few causes for concern, Callaway provides some reasons why the worst could really be behind us:

  1. Currency experts previously feared the devaluation of the Latvia currency would create a domino-like meltdown in the Baltic states and Eastern European countries. But a complete financial collapse that would rival that of the United States from last year is unlikely. If this is the main concern, things are looking up.
  2. The Obama administration is allowing shareholders and the Securities and Exchange Commission (SEC) deal with executive compensations. Kenneth Feinberg, a Washington lawyer, was recently dubbed the “special master” of compensations.
  3. As the stock markets rose, the idea of reforming the financial regulation system became less urgent. The United States doesn’t want the hassle of solving territorial disputes between regulators.
  4. After the bankruptcy hubbub concerning General Motors (GM), stocks rose on hopes that GM would come out of Chapter 11 protection more efficient.
  5. New management in corporate America has instilled confidence that companies are moving toward a new, innovative generation.
  6. China‘s government is no longer worried about the economic picture and is now redirecting its focus on minor governmental details like asking computer makers to ship Web-blocking software to all new PCs as of July 1.
  7. It seems the United States is not worried enough about the economy to deny states of millions in online gambling revenue. U.S. regulators froze millions of dollars in assets of online poker players.
  8. Deflationary worries are over, and experts are predicting an increase in Fed rates by the end of the year to reel in inflation.
  9. The media is also playing a role as the news becomes more about the bottom of the market instead of a continuing bear market rally. But investors should note that just because it looks one way doesn’t mean the opposite may happen. The markets are still as fickle as ever. Protect yourself with a strategy.

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    Max Chen contributed to this article.

    The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.