We’re really off to the races now. There is absolutely nothing that will bring down this market.

You have to understand the driving power behind this rally. It isn’t hope or nonsense, or in some way, even free money (although the Fed’s $80 billion a month sure doesn’t hurt).

No this rally is actually also being data driven.

It only takes about 4 seconds reading the talking heads on blogs and Twitter to realize that these numbskulls actually think the pickup in activity this Christmas is “gaining steam”. How this is possible is very difficult to fathom, but I think it can be well surmised by saying that these guys just aren’t playing with as much RAM as the rest of us.

Having trouble accessing those memories all the way from last year, guys?

The uptick in data is spurred primarily by the holidays, and is standard noise/seasonal fluctuation. Throw in some promising pricing in housing and a nice recovery in the US auto market in the Midwest, and these guys are now betting big that this upswing will be “the big one.”

It’s unlikely. While there are some pretty decent improvements materializing, the main weight around the global economy’s neck has not been removed – or even addressed, for that matter. We seem to be ignoring the debt and the looming, crushing money flows under the current rules and contracts, which are still very much the largest threat.

Europe is still an enormous problem. Asia is still and enormous problem. Emerging markets are still an enormous problem. And America is about to be an enormous problem.

These aren’t just going to go away. They need to be fixed. The Central Banks seems to be the only ones trying to address them; although their prescription is as much of an ailment…

By Spring, the current rounds of hope making the airwaves will go the way of Green Shoots, Decoupling, Housing Recoveries 1 & 2, and EFSF/ESM Europe Is Fixed.

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I have not banged on this pot in a while, yet its presence should have been taken as a foregone conclusion.

Still, for a moment, I’ll hang it on a shelf.

Earlier this year, I didn’t believe we’d go over the fiscal cliff, mostly because I thought “that would be stupid”.

And stupid it will be.

At the end of the day, I blame the Freshmen Tea Party Republicans for this, because they willingly surrendered a voting majority, tied their hands behind their backs, and jumped into the water – Javert style. What the hell is this, the finale of Les Miserables (that looks incredible, by the way)?

Now the ramifications of this will be dollar weakness. Also, we’re already getting calls for more Fed easing? I think that’s premature, just like the calls for QE3 were initially way premature.

But no matter what, I’m seeing a few months of intense dollar pressure, which will likely translate into EURUSD support near this 1.3 mark.

But make no mistake – over the next several years, the EURUSD will enter sudden periods of cascading, which together will lead the dollar and euro to parity. The resumption of this inevitability will probably recommence this spring.

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This is a day for the history books. A major news network – not Fox News – has finally managed to piece together that Federal Reserve policies displace economic hardship from the wealthy to the poor.

And CNN too, of all the criters.

It only took them 3 years, 9 months, and about 28 days – but they got there.

NEW YORK (CNNMoney) — The Federal Reserve’s most recent stimulus is expected to boost home prices and the stock market, but what if you’re too poor to invest in either?

The Fed unveiled its third round of stimulus last week. The massive bond-buying initiative, called quantitative easing, aims to prop up the economy through a few key channels — namely the housing market and thestock market.

Both of those channels skew in favor of Americans who are already in solid financial standing, and it seems the wealthier you are, the more you have to gain.

“Quantitative easing is a blunt tool and cannot really target specific areas of the economy, aside from mortgage rates. Even then, it tends to help the wealthy spectrum of the income distribution,” said Sung Won Sohn, economics professor at Cal State Channel Islands.

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Despite the looming $600 billion plus pump from Uncle Benjamin, that does not imply that all things are necessarily a “thought free” buy. Very specifically, I would still avoid natural gas here, and by extension coal.

I was thinking about this the other day, wondering if some of my about-to-be-deployed 25% cash position should be flung into old Jake Gint favorite NRP. It’s a coal royalty partnership that dishes out 10% annually. Pretty sweet…

But the answer I came to is, “no”.

Natural gas is experiencing pricing issues because of storage space problems. If you don’t have space for extra gas, you don’t have space to fill by bidding gas up in price. If you can’t bid gas up in price, then the only bid for higher prices is coming from things like UNG that have limited ability to impact final sold prices.

Which in my eyes means that natural gas could still crater into Christmas on the backs of a very mild winter and overproduction.

If natural gas should lose the bid, energy companies are going to have a field day – we’re talking the-greatest-fucking-Christmas-season-ever, kind of time, as they meet their quotients on ever cheaper fuel.

And by extension, coal would continue to be mutilated without exception as plants continue to convert to natural gas generators.

Thus, even though QE3 is the greatest announcement ever if you just want to buy shit and check your brain at the door, I could see lots of people taking a stick in the eye by jumping the gun and buying into some select commodities. I’m not short these commodities, mind you; just tastefully ignoring them.

The play on QE3 is most definitely found in the precious metals. Even some of the manufacturing metals could be risky as I do not foresee QE3 doing much to help real demand for goods – look what happened to Europe’s manufacturing sector after the LTRO’s and ESM/EFSF were put into effect. It would suck to be long steel only to see the sector shed 30% more of gross demand from here.

No, no, stick to silver and gold. And be prepared mentally for the day when shorting oil and the other manufacturing commodities is the right move (but not yet).

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I honestly did not expect Bernanke to initiate QE this close to a presidential election. While some of you seem to feel that this will aid Obama, I humbly disagree.

Bernanke will likely infuriate most voters as gasoline and oil ramp into November 6. That is the last thing I think Obama would like, and Romney can now run with the Ron Paul crowd, playing up Ben as a political lackey willing to sacrifice his countrymen’s wellbeing to keep the pig trough full.

Romney would be a fool not to tap into the general hatred and mistrust of bankers, to his advantage.

More to the point, I have this 25% cash position precisely because part of me thought Ben would not initiate monetary easing. Now that he has, let me be very frank – we are not selling off before next January.

What you are seeing today is a sector rotation and nothing more. Rotation and people locking in monster one day gains.

We are not done going higher.

For those distinguished gentlemen of The PPT, I advise you to just stop looking at the market gauge, because it’s going to be flagging in the red, superheating cycle, for a long, long time.

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Holy shit, what did I almost miss!?

At work today, the entirety of my desk is in crisis management mode as some client (not even mine) has managed to transform my life into the epitome of hell – I haven’t worked this hard on any of MY projects in almost two months.

How horrible would it have been, had I missed the greatest announcement ever made.

Ben Bernanke saying he’s going to purchase mortgages until the labor market improves is not much different than me saying I’m going to punch a guy with a lisp in the mouth until he starts speaking the Queen’s English.

But, why should I care? I have silver up the ass, and am all long with only a 25% cash position.

That cash will be put to work shortly.

Until my next move I can add only – we rally until Christmas.

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