Does today's record 936 point rally in the Dow mean that happy days are here again? I think it's a gift to investors who want to stop their losses after having seen their portfolios plummet in the last year. Last week, the Dow fell 22%, destroying $2.4 trillion in market value -- it gained back $940 billion of that today. As an unpleasant reminder, after today's 11% rally, the S&P 500 has lost 36% of its value in the last year. And, while I hope I am wrong, I don't see the conditions yet in place to believe that we have reached bottom with the economy and can now expect the earnings growth that would justify investment in stocks

Today's rally feels good but it is highly likely that there was an element of short covering driving up the market. Last Wednesday, the SEC lifted its ban on short selling. Investors who shorted financial and insurance companies were doing quite well last week as fears of another financial bankruptcy mounted. With today's successful save of Morgan Stanley (NYSE: MS), anyone who was short that firm -- or other financial stocks -- was forced to buy those stocks as they spiked in order to repay their stock loans. This probably contributed significantly to a buying panic.

If you need your money in the next six years, you could sell first thing tomorrow morning and you will be able to limit the losses that could come from unpleasant surprises. What kind of surprises? Here are two:

• Credit Default Swap settlements. There is no central repository of information about who owes how much to whom for their CDS obligations. Nor is there solid data on how much these CDS counterparties have in their capital accounts in the event of a default that triggers their obligation to pay up. For instance, I was surprised to learn that Goldman Sachs (NYSE: GS) had a $20 billion obligation in the event of an American International Group (NYSE: AIG) failure. Who else is out there with such obligations? Do each of these counterparties have the ability to get the government to bail them out by taking over the company to prevent them from having to pay? Probably not.

• Insurance industry collapse. The insurance industry has major exposure to mortgage backed securities – in many cases that exposure vastly exceeds their capital base. So far, no government intervention has been targeted specifically to prevent insurance companies from seeing a decline in their capital which might make them insolvent. And since insurance is regulated on a state level, rather than a federal one, it would be difficult to launch a rapid government response – unless regulators in all fifty states could agree on a plan. The logistics of such an agreement might be daunting. And during the interim period, things could get uncomfortable for customers and investors.

The real test of the financial interventions announced this week will be in the credit markets which were closed today in the U.S. Credit risk -- as measured by the TED Spread and the Libor-OIS Spread -- are near record levels of 4.57% and 3.61% respectively. If these spreads drop well below 1%, then I will start to feel that the credit markets have resumed operating. And that will be an important first step in getting beyond the low point of this financial crisis.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns AIG shares has no financial interest in the other securities mentioned.