With talk that the credit crunch is easing and markets are up noticeably from their March 10th lows – the S&P 500 has added 9.6 percent and the Dow Jones industrial average is up 7.7 percent – investors are being wooed back into equities and other distressed assets.

After all, things are pretty comfortable right now. There hasn’t been a scary headline recently and every market dip has been bought despite oil hitting $135 – and Goldman Sachs calling for a super spike to $200.

But while Citigroup’s close Friday at $21.12 a share is less than half its $55 close a year ago, and Macy’s recent stock price may seem like one of the biggest things on sale at the giant retailer – it’s down about 50 percent from a year ago – so beware of the market’s comeback for it is nothing but a big tease.

There are three principal reasons this comeback is not real:

* The consumer has hit the wall. You can cut rates all you want but when you pull up to the pump and fork over up to $100 for a fill-up your spending is affected.

* As the chart above shows, the comeback has been fueled by big oil – and not the consumer.

* The love affair with financials is ending. With many of the most profitable products all but extinct they will have to re-invent themselves as they look for ways to replace those lost revenues – and profits.

The fuel for most bull markets is credit expansion, and given current conditions that isn’t likely to resume anytime soon. Noted portfolio manager Gary Kaminsky pointed out that while the liquidity crisis may subside, the credit crisis is still with us. Banks are reluctant to loan money to an over-extended consumer.

The point is that as an investor you have to concede that you haven’t got the wind at your back. Look to stocks with pricing power in an environment where costs are headed north.

For mutual fund investors, get at least some of your money with active managers who have demonstrated an ability to navigate the rough terrain. Look at their record in bull and bear markets. Avoid sector funds unless you have the skill set to navigate the vicious rotations as hot money chases performance.

David Nelson is the president of DC Nelson Asset Management.