The Unstoppable, Indefatigable, and Undefinable Bull Market of 2009

The weather forecasters change their mind a lot this spring. Today was the same dreary mess the last 2 days were, and now the weekend may be a bit wet as well. I still hope to get some tennis in, but you never know. Not too much action today in the markets so the meat of this post may be light, and then onto the usual Friday night programming.

Small Request
Some unfortunate news was learned today. Mike Morgan, who runs the site Mike Morgan Behind Enemy Lines (as well as the much disputed site Goldman Sachs666.com) has suffered a health setback in the form of a heart attack. Mike has undergone successful treatment and is on the mend.

I would ask you to take a moment and wish Mike a speedy recovery. Financial drama can be fun and we all like to dive in deep, but the real important things in life are of course your health, your family, and your happiness. Economic Disconnect sends his best wishes to Mike Morgan and hopes the fellow blogger has a full recovery.

The Unstoppable, Indefatigable, and Undefinable Bull Market of 2009
2009 has seen a vicious move up across the equity markets. There have been some rare pull back days, but the advance has been nonstop for the most part. Sectors across the entire spectrum have rallied. Key breakout areas are withing sight and then who knows how far this toro could ramble.

With such a broad based move to the upside, one should be able to discern some reason for the action. Reading across all kinds of media I have seen various reasons given, all unrelated to each other and isolated islands of thought. Putting it all together I have my reason for the 2009 Bull Market:

I have absolutely NO idea

I am not using sarcasm here. That will come later. I just cannot put together a valid reason for the rally as nothing adds up.

Take a day like today for example. Pretty quiet until the last 30 minutes or so, and then a huge gap up right into the close. I can remember a time when nobody wanted to hold over the weekend because you had no idea what kind of news was going to come out. Now there is a rush to grab for the two day break. Either there is some real confidence out there, those in the know are tipped that any news will be good, or maybe a Friday up day looks nice. Who knows.

Tyler Durden at Zero Hedge loves to look at this kind of stuff and here is his take on today's action:

Going back to today's ridiculous close, the chart below shows it all: the complete tape painting volume spike at the very end of the day speaks for itself. And as computers now simply issue forced stock recall orders to each other, painting the tape wet with manipulative intent and volume spikes into the last 20 minutes of trading every day, their human creators are left on the sidelines, trying to outshout each other as to the reason for why the market keeps rising while the economy keeps tumbling.

Is there ever going to be any transparency in this market again?

That was some move in the last minutes of trading!

The late 90's boom was due to IT overspending and unbridled hope in the Internet. The early 2000's boom was predicated on real estate values and all the associated spending that flowed from that enabled by free credit. Those two bull markets were easy to see in real time, this is not hindsight kind of reasoning.

Today's bull market seems to be built on buying stocks. I am serious, and don't call me surely!

The vast bulk of current trading is being handled by the big boys playing paint the tape. The hope is probably that a market that has risen enough will collect more boats, or something to that effect.

There is some reason behind the buying. I think the theorem goes something like this;
-When all stocks were going to zero, the DOW was at 6600 and the S&P was at 666
-When the credit boom was at full throttle the DOW was at 14,000 and S&P was at 1500
-If you split the difference right down the middle you arrive at DOW 10,300 and S&P 1083
-This seems like a fair compromise

I know, very scientific. This would be my guess and so those would be my upside targets.

The problem with this kind of dart shooting exercise is that there are real realities that have to be confronted:
-Unemployment is till going up. A lot. While the rate has slowed by some weird second derivative amount, the numbers are still shocking
-Foreclosures of course are tracking the jobs and are set to skyrocket as well
-Earnings right now are still too optimistic and the numbers are being met by, drum roll, staff cuts. This too will run out of usefulness

Those are three big ones that come to mind. There are of course plenty more.

So I hereby name the 2009 Bull Market the "Split the Distance Bull" as the exact middle from the bottom to the top is being raced to with abandon. Just remember to abandon ship when we get there!

LOL Cats
It has been a while since the funny kitties have been featured. Here are two:

see more Lolcats and funny pictures


see more Lolcats and funny pictures

Film Clips
If you notice the graphic in the top left of the page you can see it says "Get Him a Body Bag. Yeah". If you know where that is from it is funny, if you do not, all will be unveiled.

The quote comes from the great film "The Karate Kid" and occurs near the end. After Johnny hits Daniels leg, his team mate celebrates wildly. The quote can be heard at the 23 second mark of the following clip:

Love it!

A new era classic is "The Shawshank Redemption". While there are about 5 scenes that qualify for the hall of fame, no other is as powerful as "The Tunnel" (if for some reason you have not seen this film, skip this!!):


Rock Blogging
Of course we shall have some music, I think it is required by law. Well, at least in some states, or states of mind anyways!

My mom always loved the band ABBA. Let's just say they are not my favorite. But there is one song that men all over the world do know, "Dancing Queen". If you have ever been out at a club late night or stayed late at a wedding party this song does cast a magic spell on the ladies, so as a tribute to the power of ABBA, here it is:


In recognition of the great run gold and silver have had this week (and yes it is KILLING ME!!!) take a listen to a vintage Linda Ronstadt performance of "Silver Threads and Golden Needles":


The film "Streets of Fire" is one of my favorites. The soundtrack is just incredible as well. Diane Lane plays the singer, but she did not do the actual singing. Try out "Nowhere Fast":


Wow, a little lady heavy this evening! Time to get things stepped up!

Before Ice-T was on cop shows he was a rapper and he also founded a wicked metal group called "Body Count". Rock out with "There Goes the Neighborhood" (Warning; some rough lyrics, skip if easily offended):


When a band has been around for like 100 years it can be hard to pick a song. Aerosmith has been around since the Dinosaurs died in a fiery meteor impact, and I have selected "What it Takes" for this evening:


Last call!

If you want to really get going, the masters never change. End the night on full rock mode with Black Sabbath's classic "Sabbath Bloody Sabbath":


Have a good night.