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I wish I had easy answers but I sure don't.

Just look at our Big Chart - we flipped it bullish and put up new level targets just two weeks ago and already the Russell is up 5% to test 1,000. All 3 lines over 1,000 and we're back to being bullish until 3 of 5 fail to hold our "Must Hold" lines.

We should be celebrating this but we played too cautiously as what we thought was a top and I never officially put "5 Inflation Fighters Set to Fly" or our "5 Trade Ideas that Make (made) 500% in an up Market" into our portfolios and I only said:

So lots of fun ways to participate in the next mega-rally. We don't need S&P 1,900 - just holding 1,600 would do us quite well and I cannot emphasize

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Reality, reality, wherefore art thou reality?

I like to put up this chart of the macro indicators (this one from Dave Fry) every once in awhile, just to keep us grounded as we play the market at these nose-bleed levels. And yes, I know I sound like a grumpy old bear, the same way I was accused of being a perma-bull 8 months ago, when the S&P had crashed 10%, back to 1,343 and I wrote articles like:

• "Thankless Thursday - Still Waiting for that Stimulus to Kick In" (11/1/12)
• "Two Term Tuesday - Obama Victory Allows 4-year Rally to Continue" (11/6)
• "Fed Up Thursday - WMT and the Fed Fail to Boost the Market" (11/15)
• "Testy Tuesday - Can We Hold Our Weak Bounce Levels?" (11/20)
• "Dividend Investing - Giving Yourself an Automatic Edge"

(click to enlarge)Tesla (TSLA) to $300 a share!

Well, not yet, but they are at $93 and up another 6.2% for the day in pre-market trading as Morgan Stanley puts out a note calling them "A Short Seller's Nightmare," which they are, up 177% for the year and up 57% in the last 3 sessions, during which 100% of the float turned over so, in other words, every single person who owned TSLA last Tuesday has had the opportunity to get out at record highs since then. If this is giving you flashbacks to the dot com days - welcome to the club. I picked TSLA as one of my 3 favorite stocks of 2013 but we certainly weren't prepared for this.

In fact, just yesterday, we took a short play on TSLA's rally, buying 5 of the 2015 $85/115 bull call spreads for just $7

What a rally!

The markets are going up and up and up some more, which is exactly what we were guarding against on April 14th, when I wrote "5 Trade Ideas that can Make 500% in an Up Market." At the time, the S&P was "only" at 1,588 (now 1,632 and see Dave Fry's SPY chart) and, of course, the intention of our bullish hedges was not to catch a 3% move but, now that we are up 3% in 4 weeks - let's see how they are performing, along with my other 5 inflation hedges from the following week, which I will review tomorrow.

At the time I had noted: "What's really been disturbing us is that our Materials indexes aren't following though. Not just oil and gold - those are silly things anyway - but copper and iron and corn and wheat and

A quick note on gold fundamentals first:

The amount of gold in the world is essentially fixed. Although there is a lot in the ground, the speed at which it can be extracted is fixed so gold is what it is. As long as we keep printing money - if other things are equal - gold will go up in price (not value). Here's a good chart showing the price of gold vs the Global Monetary base through 2010 (I couldn't find more recent):

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What happened in 2002(ish) to cause gold to start following the money supply when it hadn't before? Our ability to measure it is what changed. As the internet came into play and data got better, then the relationship between gold and the money supply no longer was based on "feelings" and became based on quantifiable data. So, of course, gold began to closely

(click to enlarge)Someone robbed some ATMs for $45M - amateurs.

The BOJ devalued the Yen by 1% overnight and robbed the Japanese people of $300Bn overnight. Meanwhile, the bank robbers will go to jail while the lifetime savings robbers will probably get an award - or at least very cushy jobs in the private sector once they are done pillaging the people's money in the government sector.

In our member chat yesterday, we were discussing the fact that we should take Japanese Corporate earnings with a huge grain of salt as they are priced in Yen and the Yen is down (up) to 101.62 to the Dollar today, from (and I am not kidding) 80 at Thanksgiving. That's up (down) more than 25% in 6 months and 80 to the Dollar was about where the Yen was last year as well.

So think about it - if

1,816% in 21 Days.

That's how much our "5 Trade Ideas that Can Make 500% in an Up Market" made since May 14th. Those are, of course, gains on cash, not margin but, when you only have to tie up the margin for 21 days to make it - it's a nice return (worked out to an annualized 322% on our QQQ/AAPL trade). We talk about inflation a lot and there is such a thing as trade inflation, the point at which margin and option traders are able to make so much money it distorts the markets. Don't you think we're at that point?

Let's say you turned $5,000 into $90,800 using those trade ideas - that's great but what if your cleaning woman bought $1,000 worth of Tesla (TSLA) May $55 calls last week for $1 and this morning they are about $12. Do you still think

Dow 15,000!

As noted by Dave Fry, we may be early in calling for profit-taking but, as I said to our Members this morning - I'd rather miss the first 2.5% of the next 20% move up than blow 10% of the 20% move we've caught since Thanksgiving.

For one thing, look at those volume bars - we haven't confirmed anything yet and, in fact, if you bisect that rising channel - we're actually stuck in the lower half of it with an RSI and MACD that some might call "toppy."

A lot of traders don't understand that you can't get good prices taking gains off the table if you wait until the market reverses to start selling. That being said, in our review of our two $25,000 Portfolios and our FAS Money Portfolio and our Apple (AAPL) Money Portfolio - we haven't actually found anything

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This is now officially scary.

Note this chart from Zero Hedge that illustrates how macro data has fallen off a cliff in the past 60 days while the markets have continued to climb. There are other charts to reinforce the point but do you really need more charts than this very obvious one?

Let's not kid ourselves - this is no surprise, we can see it, we can feel it - but we've been riding that market wave up and up as if it's never going to break.

I told our members I was going to do a lot of reading over the weekend to see if S&P 1,600 was justified and we just reviewed a ton of articles in our Member Chat, since 3:19 this morning, in fact, and the short story is - it's not justified. The market is ONLY up due to

(click to enlarge)Wheee, what a ride!

As you can see from the Big Chart, we've been up and down and over and out and each time we find ourselves flat on our face we pick ourselves up and get back in the race - that's the markets...

"You're riding high in April and shot down in May" are the lyrics from the Sinatra song and that is, indeed, life in the markets so we'd be foolish not to have any hedges - just in case - and we rolled ours yesterday to guard against a May drop-off but, as I reminded our members yesterday, in this crazy market - we need our upside hedges too:

DBA was one of our "Five Inflation Fighters Set to Fly" (Part 1 and Part 2) from the 20th and ALSO was one of our "

As foretold, we flatlined into the end of the month - now what?

Today is May Day, where we celebrate the Workers of the World (as long as they don't unite, of course) and that means most global markets are closed or slow but the bad economic data keeps pouring in.

Slovena's credit was lowered to junk by Moody's, China's PMI came in at 50.6, which is expanding slightly (50 neutral) but lower than 50.7 forecast and lower and 50.9 in March and, if you were paying attention to my chart lesson on Monday, you are thinking of how these readings affect the curve of the 50 dma that WILL be drawn in the future and how this WILL make the chart look - that's how you use TA to predict, rather than just react.

More importantly on China, new orders fell from 52.3 in March to 51.7

Wheeeee, what a ride!

The Russell is one of our key shorts (using TZA calls) and you can see on Dave Fry's chart how resistance at the 950 line has not been futile so far. If it does pop - it's a clear signal for us to run with the bulls again but so far, it's going pretty much the way we thought as we had QE from the Fed in November and QE from the BOJ in December and they were both good for 100-point runs on the RUT but now what?

On the S&P we've gone from 1,400 to 1,600 so also 100 points twice but 100 on the RUT is a much bigger percentage than 100 on the S&P - hence both the RUT's relative outperformance and relative danger of a precipitous fall should some of the bad stuff (and here's a dozen items to

Well, we survived that week - what next?

Although we ended with a rally, on the whole it was a terrible options expiration week with the S&P dropping 33 points (2%), back to 1,555, 42 points off the April 10th high of 1,597. On April 11th , I had warned that the popping of the BitCoin bubble could mirror the popping of the broad market bubble over the next 60 days if earnings weren't up to snuff, with only Fed and BOJ easing giving us true support.

So far, we've got 70 of the S&P 500 reporting and 2/3 of them - 67.3% to be exact - have beaten EPS estimates and that would be great except that only 1/2 (36%) beat revenue estimates, with just 2.1% year over year growth (earnings are up 1.6% from last year). What does it mean if companies are beating on

Are we having a correction or a pause for the next leg up?

As noted by Dave Fry on his weekly SPX chart, the data isn't taking us down yet. And, if earnings don't do the trick for the bears - then maybe Goldman Sachs (GS) has a point with its just-released 1,900 prediction for the S&P 500. Given the fact that the Fed is inflating our money supply by about 10% a year and the BOJ is running its money supply up 20% a year - maybe it's not so outrageous to imagine our stock indexes will adjust accordingly.

What's really been disturbing us is that our Materials indexes aren't following though. Not just oil and gold - those are silly things anyway - but copper and iron and corn and wheat and rice and rebar - things that are, traditionally, consumed in a healthy economy.

But

Bye bye love
bye bye sweet caress
Hello emptiness
I feel like I could die - All that Jazz

It's been a great rally, let's take tomorrow off!

Actually, most of the world is taking tomorrow off in honor of my 50th Birthday and, as my daughter gleefully pointed out to me this morning - I've already had 50 years, my birthday simply marks the end of my 50th and the beginning of my 51st - so, too late to whine about it now.

Cypriots are already halfway through their own economic catastrophe and they are not whining about it either as relatively small and orderly lines formed as banks, causing a Bank of Cyprus branch manager to comment: "Customers reacted fantastically, we expected much more people." We didn't. As I said to our Members yesterday:

They've got armed army guys outside each Cyprus bank and they're

No 1,565 for you!

That was my comment to members in early morning chat today as the markets began turning sour in Europe as Cyprus continues to be a worry but, more importantly, Spanish and Italian 10-year notes are pushing back to 5% as the fantasy of EU support runs into the harsh reality of abandonment in Cyprus. This was no surprise to us as we had already labeled the run-up as fake, Fake, FAKE and have been tilting more bearish since last week.

We had some quick fun in the Futures this morning, riding the Nikkei and Oil down for quick profits, but I already (7:29) warned people not to be greedy as we're just looking for that Egg McMuffin money in the morning and oil already hit $350 per contract and the Nikkei was good for $250 per contract - which is never bad for an

(click to enlarge)Wheeeee!

Wasn't that fun yesterday? There's nothing like a cool, refreshing dip to wake up a trader on a Monday morning. I'm sure there were many, many newsletters that gave you trade ideas pre-market to short the Nikkei Futures at 12,600 that ended up being a $1,250 PER CONTRACT on the dip (12,350) and those guys probably also tweeted out, just like I did, at 1:21, that we shouldn't be greedy as we zipped past $1,000 profits in 4 hours, catching the final dip to 12,350 within 5 minutes - so I'm not going to brag about it.

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This morning, our trade idea in early Member Chat was to short oil (/CL) at $95.50 as no good pre-market pump job at the NYMEX goes unpunished by us these days. We caught a nice ride yesterday from $95.50 to $94, but only after being

(click to enlarge)That's the way to do it!

Cyprus has now been fixed by confiscating up to 40% of the bank accounts that were over $100,000 without touching those that were under and, more importantly, the World did not erupt into chaos in the aftermath of the greatest confiscation of wealth since the French Revolution. If you are reading this and have money in uninsured accounts - this should worry you a lot because the EU, the IMF and the World Bank have now decided your money is not sacrosanct and even the Russians aren't complaining too much and not a peep out of Asia so all this "outrage" here is just in the countries that are under Rupert Murdoch's sphere of media influence.

Bondholders are being completely wiped out as well and GOOD - that's what happens when you try to take advantage of

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Slip sliding away, slip sliding away
You know the nearer your destination, the more you slip sliding away - Simon and Garfunkle

So close but yet so far is another song lyric that would apply to this market.

Consolidations can be frustrating things but, if you look closely at our Big Chart, you can see that this "consolidation" is tipping a bit more bearish than the one we were determined to ride out in February.

All is well as long as we hold those lines on our chart as we neatly finished right on our expected levels in each index but the S&P, which is just under the 12.5% line at 1,560 and well above the 10% line at 1,520 - so we'll be watching them closely for clues but I'm not expecting any major sell-off until after the quarter ends. Next Thursday is our

I like not having a point sometimes.

Last Wednesday I did a random post and it's kind of nice to just write stuff down and not have to worry about making a point. It also gives me a chance to put up some interesting things that might not "fit" otherwise but I think are worth discussing. There's not much going on in the market at the moment and we went over a massive amount of stuff in Member Chat between last night and this morning, so plenty to read over there if you want to know about today's markets.

Thing number one is thanks to Manix at Seeking Alpha for reaffirming my faith in social discourse. I mentioned yesterday that my post on Income Inequality has sparked a spirited debate on SA and, as our Members are well aware, I'm not a big fan of