Now we Know what Stocks They Want to Buy

DSW
BBBY
TOL
LULU
SNDK
GE

and of course

AAPL

Is it a coincidence that the markets rallied like crazy at the year-half mark? Is it exactly the same thing as last year? Yup.

Everyone is hung up on “trading price”. If you are a degenerate gambler, then good for you. You literally can’t trade enough in this environment. Keep those trades coming as we swing 50 SPX points every week and watch your capital being eaten away.

Or be an individual investor, content to buy index funds every month with your 401k contributions, not knowing and not caring much what you buy.

Or you can simply follow the tried and true path of just buying the dip. Every time the markets look weak, just buy the dip on the inevitable rumor of more free money. Of course you know why free money is so important to markets, right?

This year is just like last year, down to the day. Just do a chart overlay and you’ll have the future.

Do you find yourself wondering why the markets love economic weakness so much? Sure, it means more QE, maybe.

But why does QE jazz the market so frikkin much? I’ll tell ya, Sandy: QE is literally and figuratively like mainlining morphine (crank?) directly into the vein of the markets. Cash goes DIRECTLY to the markets! Nice, huh?

You see, if the economy recovers, it will be a slow affair, taking plenty of sweet time to filter through to the various and disparate sectors. During that time corporate results will only slowly improve after you see it in the overall economic numbers. QE on the other hand, circumvents the economy altogether. The money never filters into the economy as it stays locked in the closed loop of the investment world. In a QE manipulated regime, the economy & markets seldom meet.

So there you have it. Wall Street wants a weak economy. In fact they need it to be weak as to get the quick fix. It is the unstated Policy Tool of the Federal Reserve and the Treasury alike. As long as the numbers are weak, but not disastrous (open to interpretation), the promise of free money for markets is far more desirable to long investors than a long slow slog to economic recovery.

As Wall Street’s best friend Chucky Schumer said to Bernanke, “Now get to work!”

Since last Thursday the SPX is up about 50 points or almost 4%. This is what can happen when bad news–or any news–stabilizes.

We all know all the ills of the world. But it is an election year, folks and it is Option Expiration week too. Plus, again, Uncle Ben is here “if needed”. Never mind about volume.

It’s all good. Remember, uppy goody, downy baddy. And we’ll be at Dow 13k by Friday’s op-ex.

Bernanke spoke. He “stands ready” to help the economy by buying assets. Did you expect him to say that he woudn’t? That he was withdrawing the trillions in stimulus digi-dollars to show you bastards whos boss?

Now enjoy the Option Expiration that will be pinned to DOW 13k on Friday.

Hugh Hendry thinks so and he’s probably right.

Your comments are most welcome!

TV ARROGANCE