The Dow has been up in the past 31 of 43 months since the lows set in 2009. That’s 72% or a .720% batting average.

During that time, the average injection of funds into the marketplace through various Monetary Mechanisms has been over $2.5 billion per market day on average. And now the rest of the world is doing the exact same thing. Let me repeat that; The Federal Reserve has “given” markets over two and a half billion dollars each and every market day! Is this even legal? I don’t know, but I do know that my hypothesis back in 2009 that the unstated policy of government at the highest levels is to use the stock market as the primary policy tool in which to effect an economic recovery. It is no longer unstated but rather fully formed by policy makers worldwide.

Stock market participants have been trained by the monetary masters that capital must be placed at risk regardless of the economic fundamentals or the previously held laws of supply and demand as proven by commodity prices. I like to joke that demand will eventually be at zero while prices reach to infinity. I’m only half joking when I say that.

So here we are, one month before the Presidential election and the stock markets are not only testing their pre-crash highs, but just a stone’s throw away from all time highs. All time, Shadow Banking, Real Estate Bubble highs. Total market capitalization is just over $15 trillion, with Apple, Google & Amazon accounting for 6.5% of the entire market value of U.S. Equities. And Uncle Ben is promising a guaranteed $2 billion a day for perhaps eternity.

Any and every dip is and has been bought with fury and we are being inundated with the “everything is getting better (green shoots) meme”.

The expectation is that the individual investor will soon come screaming into the market to get those big gains. But, of course, they will be the last to the party. They also know that the Fourth Quarter is positive every year in modern markets as money managers put their money to work or lose it forever. But thrice bitten, permanently shy.

After Romney clobbered Obama with preparedness and passion, you can guess that the Teleprompter in Chief will be hard at work, mentally preparing to defeat his opponent. And as I’ve said, the markets are secretly rooting for the Easy Money guy, not the guy who wants to stop spending. Sure, and ex-Wall Street, Private Equity guy will be “friendly” to banks and markets but I don’t see how anyone could be more friendly than the Geithner/Bernanke/Obama team. They may be bad for the country long term, but kicking the can is working very well for markets here in the United States of America.

I must conclude that even with the divergence between fundamentals and reality wider than at any time in history, our equity markets are destined to test their all time highs in short order, though I do not believe it is sustainable in any way, shape or form. And if Romney wins, fuggetaboutit. Happy Party!

ADDENDUM: Before we can go forwad, near-term players need to be set up, yet again. A double top in the indices on a negative divergence should build up the shorts, again, just before a pre-election rally. And if we somehow get a crash before the election (one could come at any time as long as prices are “artificial”) then Romney wins.