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The futures are so bright, we have to wear shades this morning.

Those shades would be blinders, like we put on horses to keep them from being distracted by reality while they race forward, as we left three of our jockeys – Japan, China and the UK – back at the paddock as they are all closed today, making this a very thinly traded open to 2011 and causing us to take all the early-morning exuberance with a Lot’s-wife-sized grain of salt.

Oh we’re ready to get bullish! Ready in much the same way a fraternity pledge is ready to eat the worm at the bottom of the tequila bottle – it’s disgusting and we’ll probably be sick tomorrow but, for tonight – we get to hang out with the party boys and, if nothing else – we’ll always have our memories to look back on.

The Republicans have already put Obama on Double Secret Probation, threatening to "go nuclear" and shut down government by refusing to raise the debt ceiling unless Obama agrees to "a range of painful cuts." According to White House Economic Adviser, Austan Goolsbee, the Republicans are "playing chicken with the Nation’s financial credibility."

This is not a game. You know, the debt ceiling … is not something to toy with. If we hit the debt ceiling, that’s … essentially defaulting on our obligations, which is totally unprecedented in American history. The impact on the economy would be catastrophic. I mean, that would be a worse financial economic crisis than anything we saw in 2008.

"To not raise the debt ceiling could be a default of the United States on bond and Treasury obligations," said Republican Senator Lindsey Graham of South Carolina. "That would be very bad for the position of the United States in the world at large," Graham said. "But this is an opportunity to make sure the government is changing its spending ways." Graham, speaking on NBC’s "Meet the Press," said he would not vote to raise the debt ceiling unless spending is cut back to 2008 levels.

So happy 2011 to you, we’re really starting the year off with a bang!

Investors should, of course, thank the Republicans for their convoluted stance as this latest round of idiocy is already undermining faith in the dollar and that has already sent oil prices up $3.20 off Friday’s close – all the way to $92.20 in pre-market trading and that’s worth an extra $300M a day for the various oil cartels that will be removed from consumers' pockets (and put into the pockets of friendly politicians, of course).

The good news is, though, that that will also make Billions of more dollars available to terrorists and that will give us a great justification to keep spending $1,000,000,000,000 per year on the military without any cutbacks at all while we strip-mine all those horrible social safety-net programs that dare to give downtrodden Americans hope. Of course the stock market futures are loving this and the Dow, at 7:45, looks like it will open up 100 points as the combination of a weak dollar and a weak President is the investing class’s fondest wish for the New Year.

It’s not entirely too late to go back and read Christmas weekend’s "Secret Santa Inflation Hedges for 2011" or even some of our Breakout Defense plays from earlier in the month. As I pointed out in this weekend’s "Reviewing the Reviews" article, our GE (NYSE:GE) play from the Dec 11th breakout set is "only" up 35 cents out of $2.65 of potential gains so far as these hedges are designed to return that steady 10-20% per month while we’re on target. My review of the 2010 reviews is mainly backwards looking as I have little different to add to my "2010 Outlook – A Tale of Two Economies," which is an ongoing story and was very nicely updated by our friend Robert Reich just last week, which Washington’s Blog did a nice job of coloring in as well.

If you canWhen I have something new to say about 2011, I’ll write it up but, for now, I defer to Republican Abraham Lincoln who warned: "A house divided against itself cannot stand. I believe this government cannot endure, permanently half slave and half free. I do not expect the Union to be dissolved — I do not expect the house to fall — but I do expect it will cease to be divided. It will become all one thing or all the other." Something to look forward to in the 2012 elections, I guess.

Although he was talking about slavery, Lincoln could just as well have been talking about the gap between the rich and the poor which is now wider than the records set in the roaring '20s, the year before the great collapse of 1929. Even a 1920s sharecropper was closer economically to his plantation owner than a secretary at Goldman Sachs (NYSE:GS) is to Lloyd Blankfein today. How long will modern Americans keep accepting the premise that the rich are just better and more deserving than they are – even as the standard of living for that other 99% sinks lower and lower with each celebratory tick of the indexes for the investing class?

As I pointed out to Members in this morning’s Alert, we had a very nice up day last January 4th – the first day of the new year, when the Dow popped 200 points early on and settled in for the day up 155 points at 10,583. We topped out on Jan19th (options expiration day) at 10,725 before beginning a pretty relentless pullback that took us back to 9,900 (down 7.5%).

7.5% would bring us back to S&P 1,165 and Dow 10,700 but let’s assume we get that extra 2.5% between Friday’s close and expiration day – that’s going to take us to Dow 11,850 and S&P 1,285 and then pullbacks to 10,900 and 1,188 both of which should be rising 200-day moving averages by the time we pull back to them so I guess that means we’ll be looking for failed tests of the Dow’s 50 dma at 11,350 and the S&P's 1,225 line this week. To round out the rest of our index family – it’s Nasdaq 2,600, NYSE 7,750 and Russell 750 that will need to hold between now and the month’s end to crush our crash premise. As long as those levels hold – we can ride our bull plays along and even pick up a few new ones along the way.

I like JWT Intelligence’s "100 Things to Watch in 2011," it’s good to exercise your brain by thinking of things you don’t normally look at:

Presentations like this do remind me why it's OK to be optimistic about our future. We still live in a world that is filled with millions of bright, innovative people and you can’t stop them all from innovating and creating. Real solutions to our problems may never come from Corporate America but, clearly from the above presentation, they haven’t quite strangled the life out of small business innovators, despite the 2-year cut-off of funding as Big Business and Banksters alike hoard their cash and send more and more jobs overseas in the hopes of eliminating all possible competition on their home turf.

It doesn’t work that way. Ideas are like weeds, they will grow up around you unless you are constantly vigilant in trying to stomp them out. Big Business in America does its very best to kill new ideas and, when they have to, they buy them and change them until they look just like all the tired, old ideas people are used to. Facebook seems to have raised $500M from GS and some Russian investor at a valuation that puts Facebook at $50Bn – not bad for a company that’s still private! Amazon (NASDAQ:AMZN) is in talks to buy out UK’s LoveFilm, looking to go up against Netflix (NASDAQ:NFLX) with the British DVD-by-mail leader because, it seems, Amazon couldn’t figure out how to do this from scratch???

Also boosting the Dow this morning is JPM’s timely upgrade of Boeing (NYSE:BA) with an $83 target. Fellow Gang of 12 Member Deutsche Bank upgraded fellow Dow component Alcoa (NYSE:AA) with a $22 target (maybe they read my picks this weekend!) while Bloomberg helps out by citing Intel (NASDAQ:INTC), HP (HPQ, IBM and CSCO’s huge piles of cash as very bullish signs for 2011.

So we will join the market for today and accentuate the positive as we try to eliminate the negatives like the Euro bond nightmare, Howard Davidowitz’s take on the retail sector, worrying about our CINNs catching up to us (California, Illinois, New York and New Jersey) or Steve Harrney’s Doomsday prediction for housing. If we ignore all that, everything will be fine because the best thing to do about a problem is to ignore it until the next Administration takes over – who says politicians have nothing to teach us?

2011 is off to an amazing market start, at this pace we’ll be at Dow 30,000 by the end of the year so let’s sit back and enjoy the ride while it lasts!

Source: Manipulated Monday - New Year Starts With a Bang