Shazaam! When the Fed wants a rally, boy do they get one! As the market closed for Good Friday, we have just experienced the best 5-week rally in 70 years. Of course, the rally was helped mightily by the PPT 200-point plus final hour of the day rally on Wednesday. The market was in danger of slipping back to the middle of the long term double top (Dow 7500) and that is just not allowed on Bernanke's watch. He knows what we all know. If the Dow goes below the 7500 mark for a sustained period, it confirms the double top and eventually the index will fall to triple digits. Not 'by' triple digits - 'to' triple digits. So, since our man Ben has the printing press at his disposal and control of the government under his jurisdiction, up we go. I think the rally will continue because Ben knows we must take out our previous lower low of Dow 9000.
Oddly, the market powered higher after the Fed released the minutes from their last FOMC meeting siting more downside economic pressures ahead. They also admitted that the economy was getting worse and not better. So? Who needs and economy. The Zimbabwe stock market does not need an economy so why should we? What has the stock market got to do with the economy? The two were separated by the Fed several years ago so the subservient people would not complain about having their country stolen from them by bankers. The Fed continues to drive the market higher with conjured news and a fresh flow of cash guaranteed to solve the ills of any quandary. Besides, the Fed announced something or other about something or other and that was all the market needed for a rally. I think they said Bernanke wore brown socks with black shoes on his way to the printing presses on Wednesday. What difference does it make anymore? Just shut up and go buy some stocks. Obama said so too. Surely you are not going to question him? The Fed wants a rally. Ergo, there is going to be a rally.
Oddly, Wells Fargo bank announced on Thursday that they were reporting record earnings for the quarter. Shazaam! Just steal a few trillion from American ignoramuses, get the FASB to re-allow mark-to-fantasy accounting, let the banks borrow from the Fed at zero and lend to us at twenty plus, and presto! Record profits! Why are you still reading this piece? Shouldn't you be out buying bank stocks? Forget reality. Buy the scam. Look at it this way. If the Harlem Globetrotters were playing the other team that they always beat, which team would you put your money on to win?
Let me close the Easter message with the new prayer that our Fed wants us to pray:
Our Fed which art our ruler, hallowed be thy name. Thy federalism come. Thy will be done, on mainstreet, as it is on Wall Street. Give us this day, our stock market rally. Forgive us our doubt, as we forgive our short sellers. Lead us not into market losses but deliver us guaranteed governmentally manifested riches. For thine is the control, the market rallies, and the adulation of all forever. A-Ben.
Play the rally but remember that you only need a TARP when there is a hole in the roof.
Dow 15-minute bars, week ending 4/9/09
Chart courtesy StockCharts.com