I like to put up this chart of the Macro Indicators (this one from Zero Hedge) 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" (11/25) 
• "Cyber Monday – Record Retail Sales Trump Cliff Concerns, for Now" (11/26) 
• "GDPhursday – Fiscal Cliff Progress Good for 200 Points Ahead of GDP" (11/29)

After that, we were off to the races and people finally stopped making fun of me for being so bullish in such an "obviously" declining market.  Yes, I was early – that's the problem with reading too much and looking at the Fundamentals – sometimes you see things that seem "obvious" to you but it does take the crowd a while to catch up and, for better or worse, it's the crowd that does the buying and selling.  

So now I'm worried and, although I was clear (I thought) at the beginning of the month that we may keep going up until Options Expiration Day (today), or even to the end of May, into the holiday weekend – I've still been branded a perma-bear by readers (not our Members, who know me better) who seem angry that I dare question the market.  

Well, I have to dare – it's my job.  And I'd love to be a sell-out as bullish market newsletters make more money so we attract less new people when we go bearish but I kind of think it's my job to tell you what I think is going to happen – not just what you want to hear.  

As noted yesterday, my plan for the weekend is to do some soul-searching and try to figure out if MORE FREE MONEY will continue to trump the underlying weakness in the Global Economy.…

All are scheduled to bat today in the Stock Market's Home Run Derby.  As I noted on Monday (we like to be prepared at PSW), it's hawk, dove, hawk, dove, dove and Plosser already had his swings this morning, calling for a "wind down" of the Fed's Balance Sheet (which is updated after the markets close today).  While inflation may be tame for the time being, Plosser says an acceleration in the velocity of money could change the calculus quickly and leave monetary policy struggling to keep pace.  That is, of course, exactly what I said on Sunday morning at our Atlantic City Investor Conference, just a few weeks ago. 

While I don't remember Plosser in the audience, I have to compliment the guy on his incisive views, if not his conclusions.  Unlike Plosser, I don't think the runaway inflation is undesirable – more like it's inevitable as we not only NEED to inflate our way out of debt but we need to inflate our homeowners into a reasonable retirement and, in order to do that, we need China-like housing inflation of over 100% in 5 years in order to give 110M US homeowners some spending money.  

The average American has $40,000 saved for retirement and that is NOT net of debts.  41% of our Labor Force (57M workers) are now 55 or older and, technically, 10 years or less from retirement.  If we assume an even spread, then close to 6M people a year are turning 65 and begin qualifying for Social Security and, CLEARLY, they are NOT being replaced at a rate of 500,000 a month by younger workers.  

This should not be news to anyone – we've been hearing about "boomers" since they were born in the 50s but now the bulk of the boom, people born between 1954 and 1964 are moving into retirement and the chart below, from the last census report, shows you how dramatic this wave is (and the circled group from this chart is already 49 to 69):

These trends aren't hard to play from a market standpoint.  Back in my 2010 Market Outlook (12/27/09) we discussed this exact trend as the easiest macro to bet on for the decade and we discussed IHI at $53 (now $80 – up 51%), ISRG at $300 (now $500, up 66%), MDT at $44…

It seems that every Tuesday in 2013 since January 8 has been positive on the Dow. And this past Tuesday was no exception. Now that sounds like a trend to put money on — buy the SPDR Dow Jones Industrial Average ETF (DIA) at the close each Monday and close out the position late on Tuesday.

The Dow and S&P 500 both hit new all-time highs once again on Wednesday, while the Nasdaq hit its highest level since November 2000. The “risk on” allocation of new investment capital into cyclicals continues, although Wednesday saw leadership from defensive sectors Consumer Staples, Utilities, and Telecom, along with Financials. Nevertheless, ConvergEx reports that the average correlation of the ten S&P business sectors to the overall index averaged 82% last month. While that is below the 86% average of the past few years, it is still quite a bit higher than what we expect of a “healthy” market.

Investors have been climbing a “wall of worry” by focusing on their Silver Linings Playbook. And there’s little doubt that the silver linings are growing more prominent. The US economy is improving while unemployment is falling. Bank balance sheets are solid while corporations enjoy historically high levels of cash, and they are deploying their cash for stock buybacks and acquisitions. Most retail investors are still on the sidelines with cash at the ready, and they are starting to show an appetite for equities. Housing is displaying sound footing as demand and prices both rise. Increasing asset values of homes and stock portfolios are creating a wealth effect that is spurring consumer spending.

Furthermore, corporate earnings have been growing, but there has not been much top-line growth as businesses have been reluctant to expand, choosing instead to rely upon cost-cutting and increased productivity. However, confidence in the global economy and increased consumer spending should eventually get them to start hiring again.

Another positive for the long-term health of the global economy is the boom in North American oil and gas production (primarily related to shale and oil sands, as well as to the impact of new technologies on extraction from mature fields). As the US gradually moves toward the Holy Grail of energy independence, it would remove a major obstacle to growth that the “peak oil” doomsayers have been predicting. North America’s emerging competitive…

Today’s tickers: BMY, TIBX & WM

BMY - Bristol-Myers Squibb Co. – Shares in drug maker, Bristol-Myers Squibb Co., are ripping higher today, up 6.5% at $44.94, the highest level in more than a decade, ahead of the release of the American Society of Clinical Oncology (ASCO) 2013 Annual Meeting abstracts tonight. The ASCO Annual Meeting begins on May 31st in Chicago. Options on BMY are far more active than usual today, with overall volume topping 64,000 contracts by 12:25 p.m. ET, versus average daily volume of around 11,400 contracts. Traders appear to be snapping up call options on the name, establishing near-term bullish positions on the stock to position for further gains in the price of the underlying. Front month calls are seeing most of the action, with intraday call volume well in excess of open interest across several striking prices. More than 7,000 calls have traded at the May $45 strike against open interest of 316 contracts, with roughly 3,600 calls purchased during the first half of the session for an average premium of $0.54 each. Call buyers make money if shares in BMY rally another 1.3% over the current level of $44.94 to settle above the average breakeven price of $45.54 by expiration this week. In and out of the money call options expiring June 21st are also seeing heavy volume in today’s session.

TIBX - TIBCO Software, Inc. – Upside call buying on software maker, TIBCO, suggests some traders are positioning for the price of the underlying to continue to gain ground in the near term. The stock is up 0.40% this morning at $20.91 as of 11:40 a.m. ET. Shares in TIBX, down roughly 30% since this time last year, have managed to rise 15% off a two-year low of $18.18 reached back on April 19th. Bullish options are changing hands at the Jun $20 strike today, with around 5,000 calls in play versus open interest of 2,742 contracts. Time and sales data indicates the bulk of…