Stocks marked time on Monday, allowing the purveyors of tired wisdom to rev up the silly notion that the avalanche of economic data due out this week will have some significance on the performance of shares over the near-term. We would argue otherwise -- that the Dow is in the throes of a thousand-point rally come hell or high water and that, furthermore, corporate earnings, no matter how bad, will not derail this prediction. We have strong evidence of this already, since investors evidently had little difficulty last week shrugging off disappointment earnings from industrial bellwether Alcoa.

And neither has the bloodletting in housing sector had much of an impact, notwithstanding its crucial importance to the overall economy. Pulte, Ryland and KB Homes all took hits, but so what? What do they have to do with the mania that has been driving a handful of Dow  stocks higher despite a darkening economic picture? Who needs a Plunge Protection Team when it's so easy for Wall Street's institutional biggies to stir up bull-market headlines merely by goosing ten stocks? To suggest that "weak earnings" could turn this bullish tide is like arguing that a toot from a Tennypenny whistle could stop a cattle stampede. Stocks are going much higher, and don't  you believe that earnings, or even the state of the economy, has anything to do with it.

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-- Posted Tuesday, 17 October 2006 | Digg This Article