I opened a new position yesterday: long Helios Total Return Fund (HTR).

This is a somewhat risky fund because more than 50% of it is invested in various mortgage backed securities. On the other hand, it pays more than 11% dividend, with monthly payments.

Well, I somehow nailed the pullback. Small one, so I didn't even have time to buy much.

Now the game is changing again. During the last couple of months the trend was: dollar down, stocks up, commodities up. Last week we had several different combinations, and on Friday the dollar was up a little, stocks were up a lot and commodities were down.

I closed my (small) position in Panera Bread (PNRA) yesterday.

This is an interesting story. The company is growing fast, has no debt (amazing for a restaurant chain) and has great management. The company had a great quarter, raising some prices when people moved from full service restaurants to discounters.

Google (GOOG) reported a good quarter last week. Main number: year-over-year revenue and earnings growth. Reaction of the financial press: advertising is coming back, it's the end of recession.

Not so fast, guys. First of all, Google is the only advertising company so far showing improvement. Yahoo! (YHOO) reported a revenue drop. I'm not sure traditional media is going to report any improvement either.

I'm afraid to blow it again. Twice I've called the end of this rally or at least a pullback and was dead wrong both times. But.

We see different reaction to the news now. Last quarter earnings were met with a "buy, buy, buy" reaction, whether earnings were good or, more often, not so good. Now, earnings are improving and I can actually see real growth in some reports, but every company gets killed. With the exception of Google (GOOG), which reported an outstanding quarter. I'm going to write more about Google later. But the fact that very good earnings from Intel (INTC), IBM (IBM) and Goldman Sachs (GS) were met with sell-offs is telling.

There is suddenly a burst of articles about old news. Yes, companies have developed the technology of horizontal drilling which allows companies to extract gas (and some oil) from shale. But those who follow oil and natural gas industries have known about it since last year.

Is it game changing? Somewhat. This technology probably doubled world natural gas reserves in less than a year. It added a little to the oil reserves. As a new technology, it has a lot of room for improvement, so I expect gas and oil reserves to increase even more.

It's been almost a year since I wrote Great Depression v2.0: Missing Piece Of The Puzzle.

Let's review some main points. We have had only one full blown worldwide Great Depression for comparison: 1928 - 1938 (there is a point of view that it only ended in 1942). There are also two known (to me) depressions which were not international: the Depression of 1873-1879 in the US and the Great Japanese Depression: started in 1989, still counting.

Jim Cramer said yesterday on "Stop Trading" that Gold Prices are a Sign of "Robust" Economic Growth.

I have several objections to this.

The market went down for two days and failed to have snapback rally on the third. If I had more time for trading now, it would be perfect setup for Jim Altucher's 3x2 quant trade. Unfortunately, I can't sit at the trading screen.

Is it a correction? Is it an opportunity? As usual, we'll see later. Some would claim they made a great call and some would be silent. It's really hard to make a call here, because last month entailed a lot of panic buying by big guys. The market is now in their hands. If they think they bought enough, we are going to have a correction or sideways market. If they need to buy more, the market is going up.

In my previous article on Cramer vs. Kass, I sided with Kass, thinking that we are in a sideways/slightly downwards correction. I was wrong, at least for three weeks. We had such a wonderful rally!

Doug wrote a piece yesterday which almost matches my thoughts. Almost.

I'm outraged at the outrage. Government is spending is a pitiful $3 billion, which is not even a fraction of the total stimulus money and the return is huge. Auto sales are way up because the program is hugely popular. People are spending money, banks increase lending, gas hogs are replaced with more efficient vehicles.

Let's compare it to other stimulus packages.

I expected it a month ago. It's hard to imagine what is causing this buying panic right now. But all of the signs are clear: stocks are going up no matter what. The number of bulls on TV and in the press has jumped up.

The usual reasons for a buying (and selling) panic do not apply here. There is no change in fundamentals: maybe things are getting worse a little slower than before but big deal! Earning reports are mostly awful; the only reason most companies are beating estimates is because they cut expenses to the bone. This is not the way to improve the economy. Technicals are contradictory and sentiment is too bullish. All signs are pointing down and stocks are going up.

I sold my remaining shares of Apple, Inc (AAPL) yesterday, into strength after their earnings report. This was a strategic decision. I have wanted out of Apple for a long time, but wanted to get more money for my shares.

My reasons for selling Apple are outlined here. That article was published more than a year ago, but all of its points are still valid. Actually, they are more valid now. Point by point:

Bravo, Cramer! On the Mad Money show yesterday, Jim at last agreed that the oil futures market doesn't reflect oil supply/demand picture. He thinks it's manipulation. I don't agree. The thing is, the futures market became a way of investing for a lot of institutions. Organizations, which you can't call manipulators, like State of California pension fund or Harvard endowment fund, are investing a lot of money into commodities futures. They invented for themselves a new asset class and invested hundreds of billions.

There is one fundamental problem with the futures: they are not a real product. They are just pieces of paper. And when volume of futures becomes high enough, and traders on the market have no relation to a particular commodity production/consumption/trade, so the prices of futures don't reflect supply/demand of a real product. They reflect only supply/demand of the futures themselves. As a result, we had last year's boom/bust situation in oil futures. And it looks like the situation is repeating itself right now, on a smaller scale. The tail wags the dog.

I'm trying to look into my market crystal ball for what the nearest future holds.

Technicals

Technicals are mostly pointing up. S&P and Nasdaq composite are well above their 200-day moving averages and above 50-day and 13-day averages. The Dow still can't get over its 200-day MA with conviction, but I don't know how relevant the Dow is right now. The markets are overbought but they have been overbought for more than 3 months already. There is a small reverse head and shoulders formation in the Dow, and kind of the same in S&P, but it's not conclusive for me.

It's amazing how much trust people still have in Microsoft (MSFT). The company launched a new search engine recently and it was met with some incredible claims. This article reports that its first day out, Bing overtook Yahoo! (YHOO) and asks if Microsoft can challenge Google (GOOG) in search. Hailstorm of articles makes similar incredible claims.

I was almost ready to believe it myself, but one small thing caught my attention. I just started a new assignment, and at my new workplace Internet Explorer 6.0 is the only allowed browser. Of course, in the first several hours I mistyped some link in the browser address field, and, surprise, I see a Bing search page! I checked the browser search settings and Google was a default search engine. A little googling made things perfectly clear.

The majority is wrong. It's usually wrong on the market, this is how markets work. This rally has been going on for three months alread, and all we hear is: "Bear market rally". Come on, guys, I understand, it's hard to sit on the sidelines (never mind being short) when the market is going up. But if you don't recognize the obvious, you lose money.

I expected some bullishness, if not exuberance, by now. I have been sitting on good gains since March, and my finger is itching to press the "sell" button. But there is no point in selling when there are so many bears around. Sentiment remains neutral to slightly bearing on my unscientific screen. And I remain bullish, buying more lately. All my transactions are on my blog, you are welcome to see them.

There is a straight way to play oil contango: buy physical oil and oil futures for the equal amount of it several months ahead. Store oil in Cushing, OK or in a supertanker somewhere offshore, paying about a dollar per barrel per month and deliver it when future contracts expire. This is for serious the oil speculators, who have big capital.

Is there anything individual investor can do? And filling up your swimming pool with crude is not what I have in mind. Yes, there is a possibility to speculate on contango.

Not long ago I asked myself: what's driving this market?. Looks like the answer is clear: it's driven by sentiment.

Sentiment is always a contrary indicator. There are two major themes in most recent market commentary. Bulls think that there should be a significant pullback and they are ready to buy that pullback. Bears still don't believe that bull market is for real. My unscientific count on CNBC is about 50/50. Which probably means that the rally is going to continue. By all counts, it would be incredible, We had 9 weeks of bull market and now it looks like consolidation. But this market is incredible.