Considering the relentless rumble of earth-shaking news lately, it’s hard to believe the Dow Industrials have given up only a measly 800 points since topping in late February. I’ve noted here before, somewhat facetiously, that it would probably take nothing less than a mushroom cloud over the Saudi oil fields, or a smoldering tanker in the Strait of Hormuz, to truly spook investors.  More and more, it seems this is actually the case.

Clearly, this is how the stock market is programmed to react when the irresistible force of a massive global-liquidity blowout is pitted against grim economic realities that augur a possible Second Great Depression.  The bulls (i.e., algorithmic trading-machines fueled by OPM and Fed funny-money) are feathering back at the moment, but shorts had better dive for cover if and when the Japanese restore auxiliary power to their cooling capacity. (And neither should it be overlooked that Japan has recently augmented financial-system liquidity by a reported trillion-and-a-half yen.)  A respite from meltdown worries seems bound to produce a short-squeeze capable of recouping most of the lost ground in just a few days. If so, it would likely be a short-lived spree that will itself succumb to such nagging problems , two name just two, as $5 gasoline and a destabilized Middle East in which the U.S. has almost no role to play.