For today’s market metaphor, we scrabble up the slippery slope of politics. Yeeeeah. This is not a political blog, so bear with me as I present this next little bit as an example of what I’m seeing in the markets. Or just scroll down for your recap links and save us both the trouble.

There’s a particularly unsightly little bit of “satire” floating around all the internets called “Obamopoly”. (I don’t link scurrilous effluvium, but the Googles will helps you finds it.) With only slightly less nuance than a sixteen-pound gutter ball, it attempts to present the actions of our current government as reaching deep into our economy, Kindle-style, presumably creating some sort of nasty “monopoly” over our lives. Uh-huh, uh-huh. Wait, what? Forget about the screeching whine of rightist amalgam politics here; the graphic doesn’t even make sense. In the board game, players compete, against each other, to establish full control of the board. Not unlike in our economy, the adversary is not the game itself, but the competition. Half the “properties” in this failed bit o’ wit (they couldn’t even pull off a good name) don’t even “belong” to this administration, but to its predecessor, who would have made an outstanding player if only he could have read and counted.

Still, not much value (though plenty of fun!) in dismantling idiotic humor that fails to be clear, or instructive, or, y’know, “funny”. What’s particularly disgusting about this Obamotacolepsy bit o’ half-wit is the replacement of the classic “get out of jail free” card with a “race card” that allows the holder–again, some confusion over who’s playing and who actually is the game here, but oh well–“get off scot-free”, to be “used repeatedly as often as needed”. (Oh really, repeatedly and as often as needed? That’s pretty often, and also quite often!) Implying that somehow, in all the Big-Brotherization of our otherwise robust and thriving free-market economy, it’s all about those pesky minorities and their vast monopolistic game plan.

Anyone who failed to see that electing the first minority president in our country’s history was going to bring out the cracker honky redneck racists in force has been living under a rock the last, oh, entire history of the country. But placing government intervention, and the efforts–however valid–to save this wrecked economy, at the doorstep of race? That is hysterical, in at least two senses of the word.

So, the markets. (No, I did not lose my train of thought.) You might have noticed, we have a two-week near-vertical rally on our hands. Very, very strong movement, earnings-driven and technically sustained by… well, exactly the same Technical Analysis 101 that keeps not working in the market’s various failed attempts to pull back and correct.

Dispensers of trading wisdom like to remind us–at least a couple in the links below do–that the markets are “irrational”. I’ve never really understood what this means, since “the markets” aren’t a person or a mind, but a collection of haphazard buying and selling that either coalesces, or does not coalesce, into trends of varying lengths, redistributing, creating, and destroying money as it goes. Ascribing human characteristics to its movements is like mixing up the game played with the players; the market is nothing but the results of a lot of human actions. It is untouched by winning and losing, cold, inanimate, indifferent. Doesn’t sound particularly irrational to me.

The players, on the other hand, vary in levels of irrationality from player to player and day to day, and now I come to my point: this rally, and the price action of these two weeks, it seems to me, demonstrates a near-collective hysteria. Many of its component parts are irrational–two-fisted buying on so-so earnings, short-covering in the face of a pullback that just won’t come–but what raises its pitch is the conviction that the bottom is in, the risk is acceptable, and the reward not to be missed. With a couple intraday exceptions, there hasn’t been any dip-buying the last two weeks, because there haven’t been any dips. If you buy XYZ at 9 and sell it to me at 10, you’re a sucker, because I’m selling it at 11. The lack of volume probably means I’m selling it back to you, but that’s ok, because we can keep volleying it back and forth, all the way up to a zillion, because this is a vast opportunity.

If you’re unfamiliar with my broader stance, you can read it here, but what I want to focus on in this post is the desperate character of the buying we’ve seen since March. Granted, that adjective is a tough sell. It’s much easier to describe selling like that of January-February 2009 as desperate, because prices are falling, and fast, and falling is perceived as negative, and fast is more negative, and desperation is a negative state. Pinning the adjective on buying is much trickier, because when as we’ve seen since July 7, prices are rising, and fast, that’s perceived as positive: rising means prosperity, and rising fast means confidence in the prosperity, and what’s desperate about that?

All the same, I think all it takes to get to hysteria–the root of desperate market action–is a nimble leap across the chasm of thinking, a la the Obamochrestomathy cretins. That leap has come to us, indeed fallen from the sky and landed squat on our faces, in the form of defeated analyst expectations, and by an enormous margin! Oh, except in revenues (yeah, same link, don’t click it twice). The players in the market are frothing at the mouth with joy, because analysts who were cooking up their thinking with a spoon and a bic back in December ’08 fell well short of all the goodness we were going to produce.

The thing about hysteria is, you can’t fight it. It only takes one simple chart to show how utterly imbecilic it is, but it’s impossible to stick a fact-pin in market mania and burst it. (I recommend trading [or not, if you’re me] accordingly.) This is probably owing to the fact that Obama is not a white man, and has wrecked facts in the name of greater minority dominance. This is why all your TA 101 is belong to us. Except the hysterically bullish kind, of course, which has been working a treat.

Without further ado, your recaps:

Good luck out there. And try not to lose your head.

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