The last few weeks insiders have been dumping stock at record levels, the Federal Reserve embarked on a another money printing process, gold hit another record high, many local governments are going broke with public sector layoffs looming and un-employment is still about 10 percent.  I have in the past wrote about market steroids and the impacts it had on our economy and the impacts coming off steroids will have on our economy.  To use a baseball metaphor, it is only the fourth inning of this "new world order". 

So in terms of the SPY,



Look at 1995 and the absurd trajectory the SPY has been on for the last 15 years. 



I bring this chart back from a previous post around the bottom of 2008.  If you extend slope of the SP500 from 1981 to 1995 to 2008 you see the bottom is in "reality" the top of a long-term sustainable economy.  The slope of the SP 500 represents a somewhat stable rate of growth though it did have its hiccups (October 1987). 

Now go back up and look at the first chart.  This market level was the neckline for both tops, 2000 and 2007.

How much of the rally from the 2008 bottom has been engineered by the Treasury and Federal Reserve in attempts to mediate the "recovery" from long-term economic steroid use?  My contention is the 2008 bottom really the top of a sustainable rate of growth for the US economy as represented by the performance of the SP 500.  My question how does the debasement of the U.S. Currency by printing money change the valuations.  (how much money does the Federal Reserve need to print to make 800 feel like 1200 on the SP500?)

I am looking for a long-term flag pattern where the 2007 high is top and the 2008 low is the bottom and we are dead center today.  The market is not a buy and all those executives cannot be selling just for tax reasons.  If you are out, stay out.  If you are over-weight stocks cut back to neutral or under-weight NOW!