So…I finally took my dark colored glasses off…having missed a really nice run up that I recognized, but was so scared that the world was ending that I couldn’t pull the trigger.  Now I think this rally is over-extended, so I’m waiting for a pull back.  But, it just might not, although many many top indicators have been triggering, but with the ECB and Fed printing money left and right, I doubt these top indicators are all that useful at the moment.  So, I put about 10% of my portfolio into the market a couple of days ago.  I chose JAZZ, FFIV, LNKD, EXXI, QCOR, VMW, and added anywhere from a 3-5% trailing stop loss on each (3-5 range variation based on technical reasons).  Net, net, I can participate (I put my toe in the water) if we rally further and will add to the positions, but stand to lose little if these stocks begin to falter.    Oh, I already sold JAZZ, as it faltered right out of the gate.

As for the belief…I do believe the market believes that there will be no imminent bank collapses.  Therefore, I believe it.  Which means that I must believe in the Fed (and other central banks), at least temporarily.  All the Bears…they don’t believe (Prechter).  I think they think that our central banks will make the same mistakes that led to the Great Depression — only this time bigger and worse as the debt problem is so much bigger.  But, with the Fed having loaned over $7 Trillion in ’09 to our banks and with the ECB now printing money like mad…I do believe that liquidity will never be a problem.  It looks like the Fed is going to fight as hard as it can against deflation (which we’re in far greater danger of right now than inflation).  And I think they can do it, as the value of money is simply a belief, nothing more, nothing less…so perhaps they can continually inflate the economy while we deleverage.  This would cushion the overall blow, but it will also drag it out.  Net, net, if you believe in the Elliot Wave Theory as a model, which as I’ve mentioned before models our optimism versus pessimism in cycles as measured by the stock market and formed by the herding instincts of the lower portions of our brain, perhaps, just perhaps, the Fed is our societal cerebral cortex.  Time will tell.

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