ANOTHER DAY ANOTHER RALLY

As our fearless leader uncle Ben puts 6 to 8 Billion a day into our beloved markets, of course another day and another dollar and another rally. I was reading something today from Jeff Clark of the Stansberry Advisory service that was somewhat of an interesting take on this whole situation. He was suggesting that people consider that Uncle Ben might not be feeling the love. Let's face it I have bashed him and so has just about everyone else, yet he has delivered the greatest stock market rally of all time and enriched many people. He has also allegedly averted the greatest collapse of all time. Is this someone who should be receiving all this criticism. Ben certainly knows that in the absence of the QE stuff the stock market would be thousands of points lower than where it is now basis the Dow. Jeff was suggesting with all the heat coming his way about a possible QE 3 campaign, that maybe he will pull the rug out for a brief period and let things rollover just to say I told you so. After this he would then come back in and save the day again and find the love he is looking for by launching QE 3.

This is certainly an interesting idea, but s slippery slope to say the least. He would certainly then be blamed for the decline, and it would also take a massive amount of money to reverse it. It is much easier to keep shoving it along like he is doing than to do the heavy lifting they attempted during the crash of 80 - 09. The above chart is that of Copper. You can see where we went long this market recently. For you chart junkies, you can see the head and shoulders pattern that is there. This had nothing to do with why we went long here, but it was so obvious I thought I would label it. You can see there was some buying going on indicated by my little toy at the bottom, and we were making a higher low than the lowest low. Also, it is imperative for this market to come along for the ride due to it's correlation with the stock indexes. This market has a long entrenched relationship with stock prices unlike Gold and Silver who are Johnny come lately players here. This is an industrial metal that of course is used in construction. As a result, it has more of a logical fundamental tie to stock prices. It is still lagging quite a bit which is troubling overall. This market does need to catch up if we are going to keep steaming along.

There is so much political pressure on the Benster here that I can't imagine he would pull the "I told you so" skit. If he were to let this get started down, he might not be able to stop it so I do not advise this. I think we should just hock ourselves into oblivion. Why not take the DOW to 20k? Nobody seems to want to even be willing to cut a pet rock funding project, yet they all say they want to cut spending. We have a storm here that is going to be written about someday in the future, and I do worry about the context within which history will view this. I suspect it is going to be what do never do ever again. However, we do repeat our mistakes over and over and it does seem that we are doing so here. I still stick by what I said before that the short the end of QE 2 trade is just too obvious for my taste even if Jeff is right. Jeff has an excellent record and really knows what he is doing, so this theory might be worth considering.

The next chart is that of the Bernanke 100. I find myself wanting to look for shorts here just simply because of how much this is lagging the Bernanke 500 and Bernanke 2000. We see that we are getting allegedly some insider buying on this move now which should suggest a rally is coming. However to me the price structure suggests at this exact moment a sell. My other indicators for today are going down so I do have sell orders under yesterdays low. We could justify playing this either way, but for me longs are in the other two indexes due to how much more relative strength is present in them.

I don't see that much else out there today. We are kind of see sawing back and forth in our Robbins Contest account between + 25% and + 30% for the year. Although frustrating, I would still pose the question, how many people do you know that are up this amount YTD that can prove it with account statement? Clearly there are some, but there are also alot of posers who are not.

Good Trading to Everyone