Buy da Dip

The market lulled me to sleep the past few days and woke me up today.  ECB will deliver, and probably soon.  Today is another fear induced buying opportunity in a giant Ponzi scheme rally.  Bill Gross recently mentioned that equities are a Ponzi scheme.  He forgot to mention that its a Ponzi scheme sponsored by the U.S. government and Fed.  It doesn't take away from the short term trading opportunities which are based on perception, not fact.  The perception that is now forming is one of central bank rescues, leading to sharp rallies, and even though we got short term disappointment yesterday and today from the Fed and ECB, they will provide the goodies eventually.  So fund managers don't need to buy puts, since they got a free one courtesy of the central banks.  But remember, once the put is exercised, there isn't another one at least for a while.  But the put is still open, and if that is the case, the market will not fall much.

There is a strong air of skepticism about the rally over the past few weeks, because the economy is weakening noticeably and earnings are lackluster.  I agree with the skepticism, but the stock market is about perception more than reality.  Eventually they merge, but right now the divergence should continue and perhaps widen before it reaches a breaking point when optimism peaks.  In the meantime, you can buy weakness until the bullets are fired.