AS LONG AS THE MARKET STAYS UP…

Fiscal Apocalypse! Commodity Parabola! Bond Destruction! Political Meltdown!

Take the news headlines and throw them in the garbage. The tax bill is meaningless. So are corporate earnings and the trillions of dollars held by banks and corporations. The stock market is firmly entrenched in fantasy mode.

Now don’t get me wrong, I love when the market trades in the never-never land of false reality, especially when I’m long. It allows me to take advantage of the newly converted and those who are very late to the game. In just two months market sentiment has gone from near-record bearish and swung to the other extreme. These latecomers have allowed me to create a taxable event this week. Check my portfolio in CreateCoin for details.

The bond market–with the exception of zero percent FED money–is in the midst of a FLASH CRASH. That’s right, Muni’s and other paper is experiencing its version of the flash crash that stock suffered earlier in the year. That is when everyone moves in one direction at lightning speed. Blame higher rates on a “stronger economy” or “end of the year shennanigans”. But this is the speed at which markets move in the world of HFT. Those looking for yield should be paying careful attention and picking their spots for buying, especially in the ten year time horizon.

All of these factors SHOULD make the stock market correct, even just a little bit through the normal ebb and flow of markets. But the stock market is not allowed to drop for even two hours without a magical, mystical buy program materializing with the focus on everyone’s favorite stocks. Once the green light for levitation becomes apparent, the rest of the stock world levitates as well.

Our fiscal and monetary policies are designed NOT to help the economy. No. They are simply to give our banks what they need to survive and this will continue until THEY say when. As long a the FED pretends they are stimulating in order to help employment, the banks will get their free money at the expense of everyone else. With the markets at post crash highs, you would think that cooler heads would prevail. You would be wrong.

The day before–or the day after option expiration SHOULD be a time to see some ebb and flow. But since Greenspan gave the green light on the Sunday talk shows by saying “a stock market rally would do more good than any government stimulus”, the market has seemed one way–and it will continue to feel that way, even when it isn’t. Internal deterioration, technical signals, poliical upheaval, and bond market destruction be damned. I continue to use the fantasy levitation act to sell while its easy and you should too. If you wait to sell when its difficult, it is your own fault.