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'I Get Knocked Down, but I Get Up Again!' as the Stock Market Rallies Back

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Now investors will be watching and waiting for the FOMC's meeting on June 19.

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Bloodied but not battered, the Dow (INDEXDJX:.DJI), S&P (INDEXSP:.INX) , Nasdaq (INDEXNASDAQ:.IXIC), and Nikkei (INDEXNIKKEI:NI225) climb the ropes Rocky Balboa style, cross the ring, and come back swinging haymakers and hooks. And let me tell you, they are connecting more than a few times to quickly erase a portion of the early June pummeling they took. Why? Money flows. Money flowing into equity markets far and near.

On the docket this week? Nothing much, and that's the problem. When we get this no-news weeks, the rumor mill heats up and starts churning out headlines that would have made Walter Winchell blush. A 10-second history lesson: Mr. Winchell was a famous newsman in the radio days, not the creator of a good-sized donut chain. Did he like donuts? I don't know. What he did like was sensationalism, and he would have found plenty of competition in today's digital age.

Spend the week resting up for next week's big day, June 19. That's when the FOMC (Federal Open Market Committee), led by Chairman Bernanke, will likely give us the 411 on the near-term direction of quantitative easing in the US. This should provide some clarity, some relief, and some market hysteria. Same ol' same ol'.

Click on the image below for an interactive version of this week's Wall of Worry, or scroll down for the text-only version and an explanation of how the Wall works.





QE: June 19, June 19, June 19, June 19… the day we should find out the future of QE -- and with it, the future of the financial universe!

US ECONOMY: ISM manufacturing reading drops below the critical 50 level. I hate when that happens...

UNEMPLOYMENT: Not too hot, not too cold, but not just right. Sigh.

INVESTOR SENTIMENT: For the historians amongst us, this is technically known as a "Chumbawamba Market." "I get knocked down, but I get up again…"

HOUSING CRISIS: Early cries that we are back in a housing bubble as prices rise 10% in one month. Can we let the housing crisis end before we declare a new bubble, please?

EUROPEAN ECONOMY: Latvia gets the green light to join the eurozone and adopt the euro currency. Did they lose a bet or something?

FRANCE: French President Hollande sounds the all-clear, stating that the eurozone debt crisis is over. What a relief! Now why didn't anyone else think to do that!?

US EXECUTIVE BRANCH: Thinking about applying for their very own Wall of Worry.

SPAIN: Government officially cancels half-priced subsidized cocktails for members of parliament. This mass hangover is heading for the record books.

VOLATILITY: "Welcome to the Tokyo Casino where the best action is at the Japanese equity market tables in the back on the right, sir."

HIGH-FREQUENCY TRADING:
Lloyd: Looking like Europe's Financial Transaction Tax may die on the vine after all.
HAL: Was there ever a doubt?
Lloyd: You enrolled in the culinary academy.
HAL: Yeah, but under your name. Bon appétit, long-term investors!

CHINA: Still not making any moves to stimulate their economy. Now, you choose now to become disciplined, long-term minded, sensible managers of your country!?!

GLOBAL ECONOMY: Ho-hum, and let's hope it at least stays this way.

JAPAN: Will Abenomics work? Maybe, but first we have to figure out what it is.

DRAGHI: Germany's Bundesbank growling about the OMT (Outright Monetary Transaction), claiming it's tantamount to printing money to bail out bankrupt countries. Thereby winning the Captain Obvious Award for the week.

SEQUESTRATION: It is working so well to reduce our deficit that it has virtually eliminated the chance for a Grand Bargain, A Swell Bargain, or even a Buy One, Get One Free Bargain.

BONDS: Holy negative returns, Batman! My bond portfolio just had its worst month since 2008. You mean you can lose money with these things?!

SYRIA: Red hot already, and here comes summer.

CENTRAL BANKS: All the world's one big monetary laboratory creating a global economic creature never seen before. And we'll name it, Financialstein!

TURKEY: What has 80 million people, the 16th largest economy in the world, and enough history behind it to destabilize a barely stable world?

THE NIKKEI: Japan's daily stock market volatility running 1-5%. This brings back memories of those halcyon days of yore, circa 2008 - 2009. Red flag much?


What Is Lloyd's Wall of Worry?

by Lloyd Khaner

Welcome to my at-a-glance guide to the issues facing investors this week -- a unique tool for traders and money managers.

Typically the term "wall of worry" refers to the entire body of concerns influencing stock market action. When the wall is high, meaning the market is nervous, stocks tend to get cheaper.

This wall of worry is even more specific. Every week I list the exact concerns in the marketplace and use the list to help me make buying and selling decisions. As I like to say, "Buy fear, sell cheer."

In other words, once the the wall rises above 15 blocks, start looking for deals. If the worry count sinks below 10, consider selling; prices have likely peaked.
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