Confusing Action Today

With the Federal Reserve involved in so many markets I am not sure if our old markers we've learned over the years have as much meaning....

Strangely the dollar is up, but commodities also up....

Bonds finally cracking, 10 year falling... [Ultrashort Lehman 20+ Year Treasury (TBT) finally working] which you'd also assume would happen in parallel with a weaker (not stronger) dollar.

Befuddling but many of these markets now have the not so invisible hand of the government involved so it's difficult to read much into any of it. If the dollar were down today, all the rest of the moves today would make some sense.... instead, you just sort of shake your head.

As for the market, now that we've cleared S&P 920 - for a continued bullish stance we'd want to hold that level and see dip buying for a push up to S&P 950. Obama is going to throw in $300 B in tax cuts it appears in his stimulus, which should make the GOP cry in joy and I am shocked the market is not up 5% on this news alone. Or perhaps this was already leaked to those who need to know last week and hence the 6% move.... nah, stuff like that never happens in the stock market.

More speculative junk is rising today - Las Vegas Sands (LVS) which we pointed out yesterday as a potential short if it repeated Fridays action (+19%) is now up another 17% and butting against its 50 day moving average; lots of shorts being squeezed. I don't really want to step in until the overall market weakens because "animal spirits" are high - when you see small cap Chinese stocks of the $2-$5 variety doing their 30%+ jump thing, you know speculative fever has arrived. Same with the solar stocks which are the epitome of animal spirits. But again, the more speculative the junk people are running into - the farther along in the move we are.

Somehow we are up nearly 1% on the day versus the S&P 500's 0%, despite only being 30% invested. No complaints.

p.s. I said in Sunday's weekly review that we were missing housing, financial, and retail in most of last week's rally. Today these are among the strongest groups.

Long Ultrashort Lehman 20+ Year Treasury in fund; no personal position