Stock market addicts, the type who spend their lives glued to the screens, chortle with glee at every hundredth of a percent gain and shed hair every time the market twitches downward, had a moment of gratification yesterday.

After the retreat in the global markets throughout the last trading days and a local Sunday session marked by incipient coronaries, Tel Aviv's leading stock market indices ended yesterday with gains. Their shares and fund units resumed their northward trek, though at most they only regained a fraction of their losses.

We hate to disappoint these addict types, but the rally yesterday means nothing in terms of the future to come. The underlying crisis is too grave to end in a single day, though on the bright side, it's also too trivial to drag out for years.

Regarding yesterday's gains, one has to recall (even if with a shudder) that "dead cat bounce" - a metaphor about the cat who falls from the 10th floor. Lo! It bounces, but then is fated to splatter on the street. Anyway, after share prices retreated by anywhere from 5 percent to 15 percent in the space of two days, the market can very naturally rally by 1 or 2 percent, and it says nothing, but nothing, about the days to come.

Yesterday some market animals insisted that this blip means nothing, and that the situation is perfectly peachy keen.

The global economy, mainly the emerging markets but the major developed ones as well (the U.S., Japan) are growing like weeds, they say. Israel's situation is just as impressive: Unemployment is dropping, exports are rising and the national debt is shrinking. Even inflation remains within the Bank of Israel's target range, and interest rates, though starting to rise, remain low. All in all, that pesky subprime mortgage problem is a side issue confined to the U.S., which will affect only a small circle of businesses, these market mavens aver. It isn't a drama on the global level.

Yes, all true, but don't forget that markets react not only to the current situation of the economy: Asset prices are also a function of expectations, assumptions regarding the future and psychology. That's how it was and how it will be, and right now, psychology is playing against the market.

Interest rates are on the rise, in Israel at least, and it can't be taken for granted that inflation will stay low. The flood of liquidity that washed over the market during the last year, from gigantic acquisitions and loans, from equity offerings and the simply insane amount of cheap money flowing into high-risk avenues - all that is fated to grind to a halt. At least, it will for now, and when that happens, the market takes a pounding.

Companies that managed to raise huge sums of money from investors at weirdly bloated prices won't be able to repeat that trick. Demand for bonds will shrink, and the contraction will be felt in stocks as well.

When bond prices are declining, yields rise, and bonds become an attractive alternative to stocks. With the memory of painful losses so keen, and the chance of losses so immediate, investors will play it on the cautious side for a while.

But the truth is that nobody has any idea how the markets will behave in the weeks and months to come. Everybody's worried and hopes for the best. Hence our recommendation remains not to do anything drastic: don't sell everything you have in a fit of hysterics, but don't start shopping like there's no tomorrow, as though asset prices had suddenly become a bargain.