Let's party like it's nineteen-ninety-nine..!

Coco Rocco Oct 8,2007.

Midsummer nightmare on Wall Street awakens to a dream on Elm Street. As if by magic.

Credit crunch is to equities as a balloon is to deep sea diving. And like a ball plunged underwater, ever since 1987 the market seems to come back from the depths every time. Every precipice, every seizure, every coronary bounces back from the brink. Like magic.

Whether it be the Asian contagion, the Russian debt crisis, the LTCM fiasco, the technology debacle after the 2000, Internet bubble or the recent sub-primevil episode, every bust leads to a new boom. Like magic.

And it seems that the frequency and breathing room between these bouts of panicky declines is becoming shorter and shorter. Witness the bounce back from the February/March swan dive and this summer's swoon.

Do the powers-that-be want to start a new boom to prevent a bust? Does a new boom lead to an even bigger bust down the road?

Last month's jobs report seemed to lend cover to the Fed's slash-and-burn-rate posture. Now, like magic, given Friday's jobs data the economy is doing just fine thank-you-very-much after revisions of last month's numbers. One data point whispers recession, the next one causes little introspection or consternation. Like magic.

The market seemingly takes a magic carpet ride of born-again bullishness. Like magic.

It's party like it's 1999 once again with many stocks erupting as they did into the 1987 top and the top in 2000. But the question is whether it’s real or Memorex: will the S&P mimic the marginal new highs it made in July and slingshot back down? From where I sit any move back below the June highs of 1540 S&P suggests the uptrend may be in jeopardy. The important thing to remember is that when parabolic arcs break, buying pullbacks can be dangerous as experienced money managers will look to take not-so-graceful exits and cut-and-run before the end of the year if their favorite stocks break such arcs.