The gloom and doom theorists swarmed out of the woodwork during the 2008 financial meltdown in reaction to government actions taken to prevent the 'great recession' from morphing into the next great depression.

The blame fell on both political parties. The Bush administration began the bailout efforts in March, 2008 and by the time its term ended it had provided $29 billion in loan guarantees to allow JP Morgan Chase to take over collapsing Bear Stearns, the $178 billion 'Average American Bailout' stimulus plan, the $300 billion Homeowners Bailout, the $200 billion bailout of Fannie Mae and Freddie Mac, the $25 billion Automakers Bailout, the $150 billion bailout of AIG, and the $700 billion Banks Bailout (TARP).

The actions continued when the Obama administration took over, with a $787 billion stimulus package, an additional $275 billion home-owners stimulus plan, an additional $30 billion in assistance to AIG, the $1 trillion

Long secular bull markets in any asset class tend to fool us into believing their prices only go up. Tulip bulbs, Beanie Babies, baseball cards, Florida real estate, internet stocks. And they do only go up and it's exciting - until their bubbles implode.

Gold has one of the clearest patterns of long trends in both directions that convince investors they are endless.

Gold bugs suffered through a 20-year secular bear market when gold plunged 70% in value from an exciting record peak of $850 an ounce in 1981 to a low at $250 an ounce in 2001. By that time gold was thoroughly despised and out of favor.

However, at that point it then launched into an exciting 10-year bull market in 2001 in which it rose from that low of $250 an ounce to its next record peak at $1,900 an ounce in August, 2011.

That long-term bull

For several months, the U.S. stock market has been impressively shrugging off a staggering string of terrible economic reports that seemed to indicate the economic recovery is stumbling again, as it has in each of the last three summers.

Since in each of those last three years the stumbling economy was accompanied by double-digit corrections by the S&P 500 of up to 21%, the market's lack of concern this time has been puzzling analysts.

In my column last week I noted that although the market gets high marks for its resilience and ability to shrug off the negative economic reports, it had also made almost no further progress over the last six weeks. The Dow & S&P 500 had been trading in a narrow sideways range since mid-March, while the DJ Transportation Average and Russell 2000 had pulled back 4% or so from their levels of mid-March.

But it seemed

The market has been engaged in a balancing act for six weeks now between being made optimistic by 1st quarter earnings that are mostly beating Wall Street's estimates, and concerns about 1st quarter economic reports that are consistently worse than forecasts and indicate the economic recovery is stumbling again.

As a result, while the market gets high marks for its resilience and ability to shrug off the negative economic reports, it has also made almost no further progress over the last six weeks. The Dow closed yesterday (Thursday) just 1.1% higher than six weeks ago on March 14. The broad NYSE Composite closed Thursday just 0.7% higher than on March 14. Even the usually more volatile Nasdaq closed at 3,258 on March 14 and just 0.9% higher on Thursday. Meanwhile, the DJ Transportation Average and Russell 2000 are 3% and 2% below their levels of six weeks ago.

With the

As the potential Sell in May and Go Away influence approaches, problems for the stock market are stacking up from both the fundamental and technical sides.

On the fundamental side;

· New home sales fell 4.6% in February, the biggest decline in two years.

· Durable Goods Orders ex-aircraft orders fell 2.7% in February.

· The Conference Board's Consumer Confidence Index unexpectedly plunged from 68.0 in February to 59.7 in March.

· The Thomson Reuters/University of Michigan Consumer Sentiment Index plunged to a nine-month low in April.

· The ISM Mfg Index unexpectedly dropped from 54.2 in February to 51.3 in March, its third straight monthly decline. The ISM Non-Mfg Index, covering the services sector, also declined in March.

· Retail Sales fell 0.4% in March, the biggest decline in 9 months.

· Only 88,000 new jobs were created in March, much worse than the forecast for 200,000 jobs.

This

The bull market that began in early 2009 has finally returned the Dow and S&P 500 to their previous peaks, creating confidence with investors who had been pulling money out of mutual funds for several years finally beginning to come back to the market.

It allows Wall Street to revive its long-time mantra that supports "buy and hold" as a viable strategy, "The market always comes back". But what market always comes back, the market that investors were invested in and have been waiting to come back to recover their bear market losses? Or a newly designed market that has little resemblance to the market that went away?

The claim that the market always comes back is based on the fact that the indexes eventually come back (even though that has sometimes taken 15 to 20 years, as in the 1930s and 1970s). However, the real problem for investors in

The economic recovery has been progressing so well that it had become almost a sure thing the Fed will begin phasing out its easy money policy and QE stimulus programs much earlier than planned, possibly beginning as early as this summer.

Even the Fed seems to be preparing markets for that probability with its recent statements and speeches by individual Fed governors.

Forget about it!

There were already enough nails in the recovery's tires to run it off the road without Friday's report that only 88,000 jobs were created in March. As I said in last week's column, the economy and stock market were already at their most critical point since the peak in 2007.

Previous reports included that new home sales unexpectedly fell 4.6% in February, the biggest monthly decline in two years. Pending home sales declined 0.4%. Basic durable goods orders (ex-volatile aircraft orders) declined 2.7% in February.

The economic recovery has stumbled in the spring and summer of each the last three years.

It's not the market's biggest problem, but it looks like it might happen again this year. Reports this week showed new home sales unexpectedly fell 4.6% in February, the biggest monthly decline in two years. Pending home sales declined 0.4%. Basic durable goods orders (ex-volatile aircraft orders) declined 2.7% in February. The Conference Board's Consumer Confidence Index fell sharply in March, dropping from 68.0 in February to 59.7 in March. The Chicago PMI Index, which is often a bellwether for the national ISM Mfg Index, unexpectedly fell from 56.8 in February to 52.4 in March. New weekly unemployment claims jumped by 16,000 last week.

Perhaps more ominous, FedEx (FDX), the global shipping giant, reported a 31% decline in quarterly earnings and warned that global trade has slowed to levels not seen since the last

As the old investing maxim goes 'the trend is your friend - until it ends'. The trend of this year's winter rally has been okay so far. The Dow has gained 15.9% since its November 15 low. Last winter, the Dow gained 24.6% from the previous October until the favorable season ended May 1.

However, this winter's favorable season rally is already making headlines since it has the Dow and S&P 500 back to their levels prior to the 2008-2009 financial melt-down. And having 'come back' as in Wall Street's assurance that 'the market always comes back', it finally has investors returning after four straight years of pulling money out of the market.

The rally should have further to go. From the technical side, momentum and internal strength indicators remain positive. The consensus of the 35 technical indicators we use in our advisory service remains on the intermediate-term buy signal.

Friday's employment report confirmed the extent of the economic recovery from the Great Recession of 2008-2009.

We've already seen the two main driving forces of the economy, autos and housing, leading the way. U.S. auto sales bottomed in 2009 with only 10.4 million units sold, and have seen impressive growth since to the current annualized pace of 15 million units, almost back to pre-recession levels. Home sales and prices bottomed last year and have been recovering at a surprising pace since.

As I've argued for several years with those complaining about the jobs picture, employment is a lagging indicator, and would not pick up until those two main driving forces of the economy were recovering in a meaningful way. And now we can see from the jobs reports of recent months that the recovery is finally impacting jobs.

Friday's report that 236,000 new jobs were created in February was well

In the early 1990s, in the aftermath of the 1990-91 recession, the outcry to politicians was, "It's the economy, stupid!"

With the economy currently recovering, but anemically, an apt cry-out might be "It's the politicians, stupid." Or perhaps more accurately, "It's the stupid politicians!"

The recovery from the 2007-2008 "Great Recession" has been taking place for four years, but doing so in spite of the propensity for Washington to repeatedly throw fear and uncertainty in the way of the recovery, making it difficult for private sector spending to take over for the initial massive government spending that launched the recovery.

In spite of pleas from Fed Chairman Bernanke that Congress do its share from the fiscal side, each of the last three summers has seen the recovery stumble until the Fed finally rushed in alone (with another round of QE type monetary easing) to get the recovery back on track.

Until recently, the recovery from the 2008 financial crisis and meltdown has been in stealth mode all the way, much of the country either unaware of the progress -- or in denial that it was happening.

That's even been true of investors, whose success depends so much on being able to separate the facts and reality from the static and noise.

Statistics measuring money flow in and out of mutual funds show that many investors followed their historical pattern of holding on through the 2007-2009 bear market, suffering big losses, only beginning to pull money out in 2009, after the bear market had ended. Money was then pulled out of the market in each of the last four years, even reaching a record pace in the first six months of last year.

It's been understandable.

It was thought in early 2009 that the "Great Recession" was probably worsening into another

Gold created a lot of excitement in 2011 when it spiked up 25% from $1,500 an ounce to a record high of $1,900 in less than two months. That had gold bugs salivating, and widespread projections of $2,500 gold by the end of 2011, and $3,000 to $5,000 gold just a year or two away.

There seemed to be sound reasoning for the expectation. In the summer of 2011, the economic recovery had stalled again, the eurozone debt crisis was at full boil, global stock markets were down (the Dow was down 19% from a top in early May). And it had been expected for several years that the Fed's easy money policies would eventually create runaway inflation. More than enough reasons to pile into gold, as a safe haven in a slowing economy and tumbling stock market, and as a hedge against inflation.

As it was spiking up, gold

There's never a shortage of "big picture" theories, usually of the gloom and doom variety. They certainly sell books; often cause anxiety, sometimes even fear. But they almost never come to pass.

In the mid-1940s, as World War II entered its final stage, "big-picture" theorists warned that the pending demobilization of 10 million men and women serving in the military would send unemployment into double-digits and the economy into a serious recession, probably a depression. They warned "when the war ends, the government can't just disband the military, close down munitions factories and stop building ships. The result would be disastrous." They sure made it sounded convincing, pouring out impressive statistics that supported their theories.

But the government did immediately demobilize. Instead of disaster, one of the most prosperous periods the country ever enjoyed began. Returning servicemen, anxious to get their lives started again, had increased experience and confidence in

The stock market usually figures out what lies ahead for the economy well before economists and the Fed catch on.

That can be seen in the way the market rolls over into a bear market when conditions are still looking great, when investor sentiment is at high levels of bullishness and optimism, when economists are projecting the positive trend to continue in a straight line into the future, and usually turns back up into the next bull market when sentiment is bearish and well before the economy shows signs of pulling out of a recession.

That was most recently seen in the way the stock market topped out into the 2007-2009 bear market prior to the 2008-2009 recession, while economists and the Fed were still saying the problems in the housing sector and sub-prime mortgages would be confined to housing and would not affect the overall economy.

Then in early

Once again, the stock market's favorable season is producing an impressive rally. The Dow has gained more than 10% since its November low, with the rally accelerating in the new year -- a 7% gain in just the last 4 weeks.

There are certainly reasons for optimism and the market rally.

As it has for the last three years, the economic recovery has resumed impressively after its summer stumble. Most U.S. economic reports, in housing, employment, retail sales, manufacturing, are beating even optimistic forecasts. The eurozone debt crisis has moved out of the headlines, ECB president Draghi's promise of "whatever it takes" having successfully kicked the crisis down the road. In Asia, fears that China's economy was slowing into a hard landing have been alleviated by several months of much better than expected economic reports.

The political uncertainty of the U.S. Presidential election, and the unusually divisive election campaign, is

For a number of years, politicians and analysts have bemoaned the fact that U.S. corporations were hoarding cash to an unprecedented degree, refusing to invest it for future growth that might have helped the economy recover from the back-to-back recessions of 2001 and 2008. Lagging business investment has continuously been tagged as one of the major factors stifling the economy.

Depending on whose numbers you believe, corporations are sitting on a record $2 trillion to $4 trillion in idle cash, earning only today's minimal interest.

Not satisfied with cash accumulating from earnings or by selling off underperforming divisions, many corporations have taken advantage of the record low bond yields to raise still more cash by issuing bonds, additional cash they don't put to work either.

Of course everything these days must be painted with a political brush. So liberals pin it on corporate greed, while conservatives blame it on corporations

The transportation stocks often lead the economy in both directions. That makes sense since truckers and railroads get an early look at the beginning stage of economic reversals in both directions. They get to see changes in the shipments of raw materials to manufacturers, sub-components from suppliers, and finished goods to wholesalers, as well as changes in import and export shipping volumes, well before they show up in rising or falling monthly or quarterly corporate sales reports, which are lagging indicators.

With that in mind, the DJ Transportation Average, as well as mutual funds and ETFs focused on transportation stocks, have been a cause for concern for some time.

In 2011 the stock market plunged into a fairly serious summer correction as the economic recovery stalled. The S&P 500 fell 18% in that correction. But the DJ Transportation Avg. plunged 28%, past the official 20% threshold that defines a bear

It seems to only be when the market is in a cyclical bear market that the financial media remembers that a secular bear market began in 2000.

That is completely forgotten once a cyclical bull market, like the one we're currently enjoying, comes along within the secular bear.

As the market again approaches its previous peaks of 2000 and 2007, this might be a more helpful time to remember that we are in a secular bear market, which requires an entirely different approach to investing.

First a reminder that a secular bull market is a long-term uptrend. Cyclical bear markets take place within it, but when they end, the long-term uptrend resumes to ever higher highs. They are wonderful times for buy & hold investors, since the market always comes back and goes on to those ever higher highs.

A secular bear market is a long-term sideways

With my indicators on a sell signal for bonds since August 16, I have been warning about bonds being overbought and in danger of rolling over into a serious correction for several months. And indeed, the 20-year U.S. Treasury bond has already lost 11% of its value just since its late July peak.

Yet Treasury bonds are still significantly over-extended above the prices that prevailed most of the time before, during, and after the 2008 financial crisis, except for two previous brief spike-ups, in 2008, and 2010 (and those ended with substantial plunges back to normal).

And now another problem for bonds has popped up.

As we all know, the Treasury Department, and both the Bush and Obama administrations, battled the awful economic collapse of 2008 from the fiscal side, with greatly increased government spending, and massive stimulus and bail-out programs.

From the monetary side, the Federal Reserve used its