“Stocks are clearly having trouble extending their gains,” reports today’s Wall Street Journal. And that a number of key market health indicators are flashing red right now.  When were these indicators flashing green? We don’t recall.

Our memory of the recent rally was on kicked-off by a bogus memo from Citigroup CEO Vikram Pandit about profitability, followed by a load of baloney from stress test regulators about banks’ health.

“People also are beginning to question whether the economic fundamentals are strong enough to justify continued gains,” continues the WSJ. This has got to be one of the most naïve sentences ever written. The 40% rise in stocks since early March never had anything to do with a 40% increase in economic fundamentals. The economy is collapsing (albeit at a slightly slower pace than before).

Stocks rose because the same “irrational exuberance” that got us into trouble in the first place

Investing in this market is darn near impossible; stocks remain toxic.

Stocks suffered another day of selling, but in higher volume.  Unemployment continues to rise as companies look to tighten up their belts.  Continued weakness in the job market will continue to lead to fear in the stock market.  The tendency for this market is to go lower, any attempt at a rally and this market gets hit.  This type of market makes it extremely difficult to find stocks that will make runs more than 20%.  It is best to not burn your account and be in cash.

The big story this will be whether or not a “bad bank” will be created to assist the failure of the United States banking system.  Whatever the outcome it will mean the United States Treasury department will be printing dollars to support the banks.  Nationalizing banks who are effectively insolvent shifts the burden from

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