Your Rally Is Weak and Boring

Do yourself a favor and don’t get distracted by the political discourse taking place right now. Most of what talking heads are screaming about is more reactionary to the stock market rally than anything else.

We were oversold and are spiking up; so the camera monkey need to find a cause for it. What they settle on is what they see first…in this case, the Obama jobs speech coming up. Must be a massive run because of all that infrastructure spending we’re going to be doing, no?

So they prattle on and get some other idiots psyched up and suddenly the buying turns into enthusiastic buying.

But the real issues here should be watched closely before committing your life savings.

For instance, have the issues with the EU changed significantly this week? Is the U.S. dollar not going to be appreciating significantly now? …Maybe there’s been some visible major shift in the otherwise consistent credit contraction, perhaps?

No, no, …and no. I’m not seeing much of anything developing here, other than political nonsense with no good chance of being pushed forward. Most of today has been quiet on the “substance” front.

It was entertaining watching Pelosi have a conniption when she realized the GOP wasn’t going to even be responding to Obama’s speech. Quick question too; since when has not offering a rebuttal been a sign of disrespect?

But really, unless there’s some serious adjustment going on, I’m not changing up. I covered ERX last week, so I locked in some tangible gains. I will likely play off the overbought market that is all but assured to develop from this bounce.

First, Europe is still in trouble. This month will be very busy for them; they have meetings to discuss the potential integration or disintegration of their union and they need to get some bailouts rolling regardless, just to buy time. Lots of animosity and anxiety will be coming from that, let me tell you.

Second, the dollar is on a roll. That thing could break out to the upside, offering the first movement above what has been characteristic sideways action since late spring. There’s plenty of kindling to make it happen too; safe haven currencies getting blown up by their issuing countries left and right, the aforementioned European troubles, and equities and commodities in turmoil will all make the dollar attractive. If hot money starts to flood into the USD, expect the selloff to be exacerbated.

Finally, so sorry but attacking the banking structure of this country is a sure fire way of nuking the population. Credit will only be harder to come by from the administration’s actions. This sort of nonsense is not what we need right now; global finance has enough on its plate without dealing with mass litigation from government. If they want redemption for…whatever it is they’re bitching about now…well fine. Get it later.

This rally is to be sold, with skepticism, until we see a solution to the foreign credit crisis, a weaker dollar, stronger consumer or business development, or some combination of the three. You probably can’t wait around for the last one, as it will only confirm the bottom. But at least see the light at the end in the tunnel to some of the bigger open ended questions, before you plunge into the shark infested waters.

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