As I’ve been saying for a few years now, the NYSE has become a TV Studio, a Tourist destination and a place for your Holiday Soiree. You can thank Elliot Spitzer and John Thain…

http://www.nytimes.com/2012/05/07/business/stock-trading-remains-in-a-slide-after-08-crisis.html?ref=business&pagewanted=all

The “Paulson” of the new generation, David Einhorn, has scored more winners this week than many achieve in a decade.

Today its the ex-high-flier Green Mountain Coffee (GMCR). Plus, he wrote a dissertation that simply and understandably articulates the policy of the Federal Reserve and our political class. It also highlights just some of the damage that has been wrought by “saving the system”.

It is now officially and commonly know now that the goal of our Policy Makers is to levitate asset prices. As recently as last week, I was debating Perma-Bull, Brian Wesbury (@wesbury) about the Control of Markets. He told me that HE lives in reality!

Holy Shit, it has truly become a Costanza World.

But back to our story. I’m always thrilled when someone far more important than me puts forth the wild conspiracy theories that we have been ranting about for years. No, I don’t take my lead from @zerohedge, because I can actually be bullish when appropriate,  but his has been a voice that will be admired, again.

All I know is that most everyone has their fingers crossed and are hoping…

More bad news means only one thing; another Bear Trap.

As Euro-banks march toward their inevitable Run and failure, the prevailing perception is that the ECB will come forth with another trillion Euros, just like in December. What choice do they have? Another save!

As the domestic economy disappoints though its lack of growth, the prevailing perception is that the FED will pony up the next half-trillion or so to keep the closed-loop of the banking and investment universe happy. Another save!

The major indices are trading at post-crash highs, now near 2007 levels achieved just before the wheels came off the bus. And now there are calls that a new Bull Market is about to begin. The low-volume rally proves it as that has been the trend for the past three years. Big volume only lasts for a few hours and finishes quickly.

Forget about fundamentals for a second. Never mind the double tops, the negative divergences and the clear Distribution that is well underway. Never mind that queasy feeling in your stomach every time you pull the trigger to buy something. One can’t help but wonder if the wheels will come off the bus, again, during your latest trade.

The Bloomberg conference yesterday had more than a few dire warnings about economies/markets. Never mind as the selling this morning was all sopped up by 10am and replaced with a HFT-steady, cardiac-ready pattern of buy programs.

We are now just 5 SPX points above my April 17 high. Patience, as they say, “tops take forever to form and bottoms are formed quickly”.

Here we are, on May 1st, and the major indices are breaking out, again, and on low volume, again. My April 17 top call has failed for the moment. But as every Strategist will tell you, “I’m just early”. 

Also remember last year when markets had a fantastic “Magical Mystery Rally” as the third quarter began and before a harrowing and volatile drop? This year’s action has been remarkably similar to last year and the year before–but many people will tell you that it is different this time. I dunno.

After a small retracement (and renewed doubt) to the latest Primary Breakout near SPX 1360, markets are as confident as I have ever seen. In this election year and with Central Banks in full control, nearly everyone understands to “be long or be wrong”. We are all of one opinion and the only “wrong-thinkers” are obviously crazy.  Any un-American short sellers are being forced out, one by one.

This game is getting simple; just do exactly the opposite (Costanza) of what fundamentals tell you, stick with the prevailing trend, don’t fight the FED and do what everyone else is doing, namely buying liquid financial assets. QED

After a tough first two weeks in April, the markets roared and ripped higher after Apple’s and Bernanke’s recovery last week. And just like that, the pullback was “healthy”, the economy “is just where it should be” and the “Bernanke Bid” is once again in full force.

For the three years of “recovery”, where Obama the Magic President made the stock market double, you have been told to simply “follow the trend”. This year you are told to not listen to the news but simply to pay attention to the “market’s reaction to news” as that is what is important.

With simple domestic stabilization and an overseas’s shit-show, everyone knows all the bad news. Yet we are within a spit of all time market highs. The question become as to what will be the “news” that forces those who have drunk deeply from the kool-aid, to dump equities.

There cannot be a failed auction of any governments paper as Central Banks will not allow it. Overall earnings are continually adjusted so most companies beat expectations. So what can it be? Perhaps financial reality will set in.

The real answer is that there doesn’t need to be a catalyst, there are many in which to choose from. What you already know will be the reason, and that it didn’t matter until it does.

So, Apple goes up $50. Amazon rises $30. Bad news is wholly ignored. “Never mind the negatives, its how the market responds to them that counts”, is what you’ve been told.  Its a great market environment this moment.

After starting April with a little corrective downtrend to the latest primary breakout near SPX 1360, and some calling for the end of the world, the combination of Apple earnings and Bernanke’s psychological perfection was a combination that could not be ignored. So we quickly traveled up to make back what was lost in the ensuing two weeks, yet are still down for the month and still stuck in a range near the top of the recent trading range. It has been another of those “Death Squeeze” markets, where reactions have been extreme.

It is no coincidence that the markets fell going into last weekend’s gab-fest in Washington with the G20 and the IMF. They were doing some fundraising for Europe and it was only partially successful. But after Bernanke spoke, the general market perception is that “we are near where we should be” in the economy and only the domestic earnings picture matters. So be it for now.

Markets are once again enamoured with the prospect of unlimited assistance if the market should ever substantially correct, so it won’t substantially correct. A masterful psychological strategy by our Uncle Ben. And it has taken a few years and more than a few trillion dollars to get here.

My long-standing topping call near the tax due date of mid-April still stands. We have not broken out, yet sentiment is quickly morphing to “indestructible”.