Water Cooler Talk

I'm so sick of all the experts feeding the notion the battle in Washington dramatically slowed the economy. The fact is this economy was limping along and there should be no discernible impact - even on a short term basis. Furloughed workers on what quickly became paid vacation were spending money like we all do on vacation. True national parks, which pay for themselves, shouldn't have been used to inflict maximum pain, but even their closure isn't going to lop off a big chunk from GDP. The reality is we now have a convenient excuse for the White House and business missteps already in the pipeline.

In the meantime, all the doom and gloom added yet another cloaking layer over the most stealth rally ever. The S&P 500 hit a new high joining the Russell 2000, and other major indices aren't far behind. Part of me loves the enmity of the rally because it gives my subscribers a chance to be positioned head of the crowd even on names that have already made big moves. But, another part of me frets, this is the movie seen over and over, and yet the outcome doesn't change. At some point, the masses will pour back into the market. I've always suspected such a move would be triggered by Dow 16,000, which is when I think Fed money-printing comes into play.

On that note I liked the action on gold yesterday, although the chart is still horrific. Once this precious metal turns and reverses the trend of lower highs, it could serve as a signal that the Fed's printing is finally seeping through bank vaults onto Main Street, and that's going to spike stocks, too. At that point, the stealth rally begins to be water cooler talk.

On the flip side, gold under $1,200 is a sign of deflation and one of the worse problems for the economy (if you think closing the Grand Canyon is bad, what if all your assets lose value in a death spiral- but to be clear this is not the scenario I see at the moment).

Changing of Guard

It has been years since I've asked anyone to buy Hewlett Packard (HPQ), Intel (INTC), Microsoft (MSFT) or Oracle (ORCL). I suspect for now I'll have to add International Business Machines (IBM) to that list as well. This was once one of my never sell stocks, but that's all changed as the company is lumbering under its own weight and inability to dance in the rapidly changing tune of the tech world. On the other hand, Google (GOOG) reported last night and its shares promptly soared $72.00.

There are tons of new names far from being known in most households but touch our daily lives, and now the market is responding to them as well. Because of weighting, the behemoths have a certain amount of influence with quoting, but these other names have the kind of coattails that take what could have been a 200 Dow drubbing point to make it only a two point decline.