Well, Matt—if your research holds any water, today must have been a BOOM day for the (RAFI) fundamentalists out there.

And this huge rally for XLF? I don't believe it for a second. In fact, the same dangerous impulses that led me to buy XLF at $15.07 (and see it promptly drop to below $6) are urging me to sell now that we're almost touching $12. After all, in that October binge of ETF buying (heavy on XLF and FXI—that would be the SPDRs Financials and the FTSE/Xinhua iShares for the less-ETF-focused among you), I'm actually AHEAD right now ... after a disastrous start.

In this environment, I'm looking forward to talking to Rob Arnott this Thursday at 1:00 p.m., where he'll be doing a webinar discussing bonds' recent 40-year outperformance of equities (register for free here) as well as current market conditions. Rob is working hard as always and has done some great recent research. He's one of the people in the mix in our world who I always listen to when he has something to say.

OK, so let's get to it. For what it's worth (and I've already shown I can be as humbled as anyone by market swings), here are five reasons I don't believe this rally will last:

1. We are up (SPY is up) 35% since the bottom. Thirty-Five Percent. The markets are supposed to lead the economy by six months. I just don't believe our prospects have magically come up 35% off the bottom of this economic cycle.
2. There is still no concrete evidence that the administration really knows what they're doing. The TED spread has really come in—to less than 100 basis points. But we're still well higher than where we'd been a couple years ago and stretching into the past. We all want to believe in the stimulus plan. But I suspect it gets tougher before it gets easier. Be prepared for that.
3. I mentioned SPY being up 35% from the bottom. For XLF, that number is 100%. XLF has flat DOUBLED from the bottom. Indeed, the Deutsche Bank team today recommended that investors buy its short STOXX 600 Financials db x-trackers as its "idea of the day."
4. Everybody and their mom are buying right now on the retail side, but there's not much institutional conviction (see the MarketWatch article I mention below). Consensus there says bear market rally. My money is with the big boys.
5. Don Friedman says, "looking for an opportunity to short as we near 9,000" ... and I ALWAYS use Don as my contrarian indicator. So maybe we should stay long after all. In the same breath, though, Don adds: "Hoping that USO has started a bull move as it busted through $30 today." Sounds like Don might be running some very sophisticated market neutral-strategies down there in Atlanta.

Basically, nearly everyone is saying "bear market rally" and that the "Smart money starts to bail on stocks' rally."

In short, this market is again telling us why it's so irresistible to watch, and while we're tempted into the same dumb mistakes again and again.

A MONTH ago the same MarketWatch ran this "Holy Hindenburg" story on the market's imminent plunge. So don't hold your breath on calling the top or the bottom.

But DO get your ducks in a row. Because if you can't take the market losing back 30% or 40% ... or even 50% ... from here (which it absolutely could), then you should not be in it. Go buy some of grandma's CDs.

Better, yet, as I've been saying for months ... get a plan and stick to it. The odds are, you're in the vicinity of what is very likely going to be a historic buying opportunity for equities.

I'll take my chances with a well-considered asset allocation plan.

It may be a good bet or a bad bet, but it's a bet all-the-same. Let's not pretend otherwise.

We are in completely unchartered waters here.  We have no idea what the financial services industry will look like in six months. We cannot even be sure what it will look like in six days.

We've got the House Republicans playing political football with the bailout; Henry Paulson trying to appoint himself czar; Wall Street banks begging with one hand and lobbying with the other; and Presidential candidates who refuse to comment on the most pressing financial crisis in eighty years. 

There is a black hole of leadership in this country, and that's frightening.

The only reason there isn't panic on Main Street is that people don't understand the credit markets. The credit markets have stopped functioning. LIBOR spreads, money markets, CDS contracts, muni's ... the market is in chaos. This will hit Main Street in a very real way if it isn't corrected soon: companies will be unable to meet payroll, factories will be shuttered, etc.

A few points to remember:

• We don't know for sure that the bailout will go through (although it looks like it will).
• We don't know for sure that the bailout will work.
• We don't know for sure what regulations will be enacted next year by Congress to constrain the financial sector in the future.

That last point is a big one. Regulators are going to rewrite the financial laws next year. The days of 33-1 leverage are over, and that means that profit growth and P/E ratios will shrink in the Financial sector.

I'm as tempted as you are to call a bottom in Financials and pick up some bargains. I've almost bought XLF myself a few times over the past week or two. I may do it yet. Over the next few years, there's probably a good chance you make money on that trade.

But with all the uncertainty and poltical brinksmanship going on, no one ... no one ... has any real insight into how this will turn out.

In the best-case scenario, banks will not return to their 2006/2007 profit levels for many years to come.

In the worst case ...  well, our fearless President said it best:

"If money doesn't get loosened up, this sucker could go down."

---Sign of the Apocalypse---

According to Ali Velshi, senior business correspondent for CNN, reporters at the station are not allowed to use words like "meltdown" or "free fall" to describe the markets without prior approval.

A spokesman for the Wall Street Journal says the paper is "staying away from" words like "crash," "panic," "apocalypse" and "pandemonium."

I understand that this is the most reflexive market we've ever had; a big confidence game.  But when the media starts banning words, that doesn't exactly inspire confidence, does it?