Regardless of how the pundits put it, they all want a repeat of the 1997-2007 Bubble Play. They think they now know how to get out a day before the Bubble bursts the next time. Granted that the current mini-rally on the S&P from 1050 to 1150 is not a big deal but all the QE talk (quantitative easing, ie Ben’s helicopter scenario) is all bluster in my opinion. The blow-out to the downside which started on 9/22/10 in the dollar-gold relationship is probably the final cleanout of that mentality.
What this means is that the Macro’s will take over soon. Until both sides of the aisle in Washington admit to how bad it was in March 2009 and decide to really get employment growing this is a market going nowhere and probably somewhat lower. The most important part is to bring jobs back to the US through tough trade monitoring and taxation measures. Otherwise a double dip will be in the cards, not this year because we are still getting benefit from stimulis measures, but in the next six years if the numb skulls get in power.