Waiting on S&P 1080; Ben Beranke Makes Vague Threats of Raising Rates - Market Calls Him On It

It is amazing how complacent it is, and remains out there. Everyone (and their mother) awaits S&P 1080 as our birthright. And after that S&P 1200. When (not if!) we get over 1080, we'll have the upteempth "double top breakout" - chasing into the market as computers rush in on that signal has been a huge winner countless times the past 7 months. I would expect no less this time around. I will join the lemmings and rack up some SPY calls and (again by birthright) make money while laughing at how obvious this all is. What is fanciful is the complete lack of fear that we can actually go down for any sustained period of time. But we don't, so until we prove we can... we won't. After two shady weeks, we are back to "correcting" by going sideways, rather than down.

The dollar showed a bit of strength today after Bernanke says "one day we will raise interest rates". Haha.

• Federal Reserve Chairman Ben Bernanke said the central bank will need to tighten monetary policy at some point to prevent the emergence of inflation but it's in no hurry.

Ooohhhh very threatening Ben. Shiver me timbers. (Translation: "Dude, we aren't doing a darn thing for the next year, please go forth and speculate at will - I have to PRETEND I am going to do something and this vague language does the trick.")

Now I want to point out how pathetic things are - in Australia when the central bank actually raised interest rates this week, the stock market jumped. Because that signals strength. In America when our central banker even threatens in some vague way to take away the punch bowl "some far off day" the S&P dropped in premarket. Because that signals our leaders might take away our fiscal toys. Compare and contrast... this is the addiction to free money that curses us. I was almost laughing at the Bernanke comment - gee thanks for the "new information" - glad to know that some day in the next 100 years we will raise interest rates again.

In last week's weekly summary I wondered out loud if the same old game plan as last earnings period would be enough - that is slash enough workers to expand profits to a point you can beat analysts estimates. Analysts who apparently have yet to figure out the benefit to bottom lines by taking out 10-20-30-40% of your workforce. More importantly are we still going to bid up companies already trading at 40-60-80x forward estimates simply because they beat analysts estimates by 4 cents? (I suppose bidding them up to 60-80-100x forward estimates). Thus far the early answer is yes... valuation means nothing ala 1999. All this Monopoly money we have must be put somewhere.

With the Evil Empire (GS) and the Franchise (JPM) reporting next week it is very difficult to even consider going short. I anticipate the market performing a "gap up" over that S&P 1080 premarket after one of these 2 firms "surprise us with fat profits" .....so we can all chase into the market like lemmings sometime next week, since it's all about technicals and valuation can be damned. I am hoping the CEO of the Evil Empire told their troops that last quarters 97% winning percentage was a bit egregious, and they should at least pretend they don't run the market, and to purposely "lose" a few more days in the third quarter [Aug 5, 2009: Goldman Sachs Q2 Winning Percentage: 97%] . So here's to a 91% winning percentage in Q3!

Anyhow, whatever the results just remember to act surprised, bid up stocks to any valuation because all that matters is someone else (or their computer) is willing to pay even more than you for said stock certificate. And with US pesos being handed out by Ben Bernanke, the Monopoly banker - we can be confidant buy high, and sell even higher will continue to win! But never fear Ben will "raise rates someday".