Welcome to another action-packed Monday. The weekend went by fast, no? All in all, it looks like a good week to be long the financials for a quick trade. Though by “quick trade,” I really mean a lightning-quick trade. The kind that works best for trigger-fingered scalpers who like catching moves that threaten to finish before they start.As the great Bob Dylan sang, that ain’t me, babe. Or I should say it isn’t “us,” rather — because no one particularly favors those types of trades here at Taipan. We’re not the ones toggling back and forth between multiple trading screens 40 times an hour.

That type of action can be profitable for the properly caffeinated in-and-out set. But you have to be psychologically built for it (and physically set up for it). For most of us, in contrast, the words of trend follower Ed Seykota ring true: “High frequency trading makes about as much sense as high frequency flying.”

That’s why Taipan focuses more on swing-trade type opportunities, where the goal is to carve out meaty chunks of a move over weeks (if not months) at a time. There’s more money in sailing with the wind, we’ve found, and less hassle in not being chained to a screen.

So what is it, exactly, that has the short-term trigger-pullers so excited? Believe it or not, it’s basically the chart below (and others like it in the financials).

As Taipan Daily covered on Friday, there is a growing sense of hope that the worst has passed. The belief is that the Fed may be close to “done” slashing interest rates, and that after this week’s meeting, all things credit-related will start looking up. This belief has pushed up financials (and pushed down safe-haven assets like precious metals).

Growing Wheat in the Desert

Let’s be honest here, shall we? Your humble editor suggests that the “all clear” whistle is being blown by idiots. Now, “idiots” is undoubtedly a strong word. But it’s a tame word in comparison to some that come to mind upon hearing from the likes of James Oelschlager, a money manager based in Akron, Ohio.

According to Barron’s, Mr. Oelschlager runs $1.5 billion in assets. How he ever amassed that sum, one is hard-pressed to say. This is the opinion Mr. Oelschlager expressed on the current market environment: “Stagflation won’t happen . Money [supply] is under control. Valuations look cheap. Lousy sentiment is always bullish. Wheat will grow in the desert when man’s imagination fertilizes the soil.”

Madre de Dios! If you are bullish on the banks and brokers here, you should quake in fear knowing that this man is on your side of the ledger. Let’s break down that treasure trove of nuttiness shall we?

Stagflation won’t happen. Except for the fact, sir, that it is already happening to tens of millions of Americans.

Money [supply] is under control. On which planet, exactly? Alpha Centauri?

Valuations look cheap. Valuations of what? This is about as helpful as saying “restaurant menus look cheap.” There’s a difference between Smith & Wollensky’s and Joe Bob’s Chicken Shack.

Lousy sentiment is always bullish. Two pips for honesty here. at least you’re revealing your true colors.

Wheat will grow in the desert when man’s imagination fertilizes the soil. Ah, what a quote. What. a. quote. This one is, how might one put it, a “humdinger.”

Grade-A Fertilizer

As a Barron’s-anointed standard bearer of the bulls — in the midst of a full-blown food crisis no less — Mr. Oelschlager has made his case akin to that of growing wheat in the desert. The mind boggles.

No lack of touch with reality here, hey? For cynics like yours truly, this is manna from the Gods. Stocks will go up and up and up, as certainly as man’s cheery attitude can make crops take root in sand. could there be a better example of stupidly wishful thinking? Even Norman Vincent Peale would turn away in shame.

And speaking of “man’s imagination fertilizing the soil”. Mr. Oelschlager’s imagination is certainly being fertilized by something potent. Whatever it is, he should bag it up and sell it in the gardening section of Lowe’s or Home Depot — if not to farmers across the globe.

Our lovable Barron’s buffoon also grounds his optimism in belief that the price of oil will fall back to $75 soon. (Never mind the fact that the only way crude oil falls hard is if equities fall even harder.) But enough about him. Bullish goofballs willing to rave about wheat in the desert are probably more the exception than the rule. The broader point is, they are out there. and it doesn’t take many of them to bid up a market on the slightest ray of hope. And some of them are running billions of dollars.

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