The IPO and secondary business is heating up. More and more issues are coming to market. For what's coming today and tomorrow, check out TheFlyOnTheWall.com. One game here is get in on the IPOs and secondaries, sell when they come. "Some of my clients are out by 11 AM," one broker told me this morning. With secondaries, the stock typically falls when the secondary is announced, then the secondary is priced, then the stock rises. You buy when it falls. (I wrote about STEC yesterday.) There is risk in IPOs and secondaries. But, in today's ebullient market, they're a good bet. Secondaries coming today are Evercore Partners (EVR) priced last night at $20.15, Swift Energy (SFY) priced last night at $18.50 and Cott Corp (COT) priced last night at $5.35. A IPO coming this week is Avago Technologies (AVGO). To get in on these, you need relationships everywhere.

Everyone is surprised at what's happening in the stockmarket. Here's today's Wall Street Journal piece:

Stock Market Runs With Aging Bulls
What might be the sequel to the surprise summer hit: The Incredible Rising Stock Market?

At 1005.65, the Standard & Poor's 500-stock index is nearly 50% above its March low. The potency of the surge caught just about everyone off-guard. Yet the rally shouldn't be that surprising, as stock markets nearly always rebound when investors see an end to a recession. The big question is what happens after that initial surge.

Excluding the current downturn, there have been seven recessions since 1960. In the 12 months from the midpoints of those contractions, the S&P 500 rose a solid 17% on average. But in the following 12-month period, gains were harder to come by, with the S&P 500 adding only an extra 4% on average.

What does this history tell us? If the recession ended in June -- and most economists predict gross domestic product will grow in the third quarter -- the midpoint of this downturn would be September last year. In the 10 months since then, the S&P 500 is actually down by around 14%. So it wouldn't be surprising if the market rallied further from here. And with the Federal Reserve still intervening heavily to hold down borrowing costs and the government spending money hand over fist, few want to bet against this bull run.

However, every post-recession period is different, and this one still looks nasty enough to cause disappointment on fundamentals.

Indeed, the bulls' weakest point is their reliance on the earnings rebound predicted by Wall Street analysts. The S&P 500 is trading at 16.8 times consensus 2009 earnings, above its level at the market peak in October 2007. That is why the bull case says investors need to look even further forward, at 2010 forecasts, which gets the multiple down to 13.3 times.

But that distant-hope scenario has its shortcomings. Take a stock like Home Depot, trading at 16.8 times consensus fiscal 2011 earnings, very high for a company facing intense competition and exposed to the troubled housing market

Implicit in the bull case is the belief that the government just has to carry the economy until private actors are ready to take up the slack. One problem: The amount of government intervention has been so immense that the private sector probably can't take over anytime soon.

Of course, the Fed and the Obama administration can always keep printing and spending, but those actions in themselves could hurt stocks, as they cause misallocation of capital and stoke fears about the deficit and inflation.

Japan's experience shouldn't be tossed out. After its bubble burst, the country's stock market often rallied on recovery hopes, only to fall back hard. That message shouldn't get lost in translation as investors wonder what's next for U.S. stocks.

Where will it go next? Richard Russell, guru of the Dow Theory Letters, Inc. writes yesterday:

One thing I've learned after 50 years in this business is that a trend will continue in force until that trend ends -- no further, no less. That's a truism, but unfortunately, I don't know anyone who can tell us how high a trend will carry or when a trend will end.

If an "expert" wants a little publicity, he can make some damn fool statement that can't be verified. If the statement is bullish and it proves to be wrong, well, nobody will complain. Wall Street's business is distributing merchandise to the public, and every optimistic statement or bullish prediction helps. So the Street never complains when bullish predictions don't pan out. At least the "expert" ventured a guess, and so what if he proves to be wrong as he usually will be? Nobody's keeping tabs on him or her.

It's hard to believe, but "Maestro" Alan "bubbles" Greenspan still attracts attention when he spouts off one of his opinions during a lucrative (for him) speech. The Greenie's latest brilliant idea is that the Fed will not raise rates any time soon. And, of course, that gives the banks "permission" to follow their most profitable line of business -- the carry trade.

Over recent weeks and certainly since the Dow Theory bull signal, the Lowry's statistics have improved. On July 10 Lowry's Selling Pressure Index stood at 885. Yesterday that Index stood at 859, down 26 points. On July 10 Lowry's Buying Power Index stood at 82. Yesterday it stood at 94, up 12 points. What this shows is that most of the market's upside progress over recent weeks was made by a decline in Selling Pressure, not by a rise in the urge to buy. If there's a flaw in this advance, this is it -- the urge to buy is still lacking.

Question -- Russell, get off it -- what do you really think is going on?

Answer -- We tend to forget that every move, large or small, in the stock market is entitled to a correction. I believe that the rise from the March lows is simply a correction of the huge bear market decline which preceded it.

Normally, a secondary correction will recoup one-third to two-thirds of the ground lost during the preceding bear leg. To refresh your memory, the preceding bear leg carried from 14164.58 on October 9, 2007 to 6547.05 on March 9, 2009 -- a total loss of 7617 points. A one-third correction would carry the Dow to 9083. A two-thirds recoup of the bear market losses could take the Dow back to 11619.

Subscribers should know that following the famous 1929 crash which took the Dow from 381 to 198, a correction took the Dow back to 294 in early 1930. That correction turned the entire investment community bullish. The public piled back into the market. However, the correction had nothing to do with an improving economy. In fact, the great 1929-1930 correction was followed by the greatest market wipe-out and economic depression in history.

If you ask Harry Newton, "guru," where's it going? I say it goes up, until it goes down, as it will because this latest increase is too strong, too fast. So stick with it for now, while it's good. Be prepared to pull out -- Remember our inviolate 15% Stop Loss Rule. If it drops 15% from its recent peak, you're out. End of story.

Really impressed with STEC. I listened to yesterday's conference call. What a joy to have the founder and majority shareholder still running the company. What a joy to hear they're doing so well and now supply all the world's key storage makers. More about them tomorrow.

Leveraged and inverse ETFs are supposed to make a daily move inverse or double of what the underlying index does, writes my reader friend, Robert Coates. "Those leveraged and inverse ETFs which you wrote about yesterday are good -- but only for the one day. They are to be used only for short-term moves of a day or two. That's it. Of course the brokers didn't understand and thereby mislead their clients. They didn't understand what they were selling. These ETFs can be very useful for very short-term traders."

A small something for the environment.. Paul McCartney, the former Beatle and vegetarian pop star, has asked fans to go meatless on Mondays to help slow global warming by reducing the amount of gaseous emissions from farm animals. Cows, pigs and sheep bred for human consumption discharge millions of tons of methane, a more potent greenhouse gas than carbon dioxide. Livestock accounts for about 18 percent of greenhouse gases, more than all the world’s cars, the United Nations Food and Agriculture Organization has said.

“If you want to fight climate change, it’s not only about electricity and coal-fired power plants: Agriculture is a huge contributor too and meat consumption is a big problem,” Jan van Aken, a biologist and agriculture campaigner for the Greenpeace environmental group, said. It’s “mainly burps” and animal flatulence, he said.

“If you have a meat-free Monday and that can reduce our emissions from cattle by 10 to 20 percent,” van Aken said.

Some people are obsessed with planes. All I know about this is the photo, which I think is neat. I'm following this airplane-morphing theme from yesterday's house built from a plane. Here's a bus built from a plane. I'm guessing you can drive it on highways.

P.S. This is not a chick magnet, unless you're after the 75-to-death variety.

The Roundabout Theatre Company has consistently the best shows in New York. We have had a subscription to Roundabout for eons. Last night we saw:

It's a musical highlighting the wonderful music of Irving Berlin and Scott Joplin. It's the best Broadway show I've seen in eons. Get yourself tickets before it closes on September 6. Tickets from Roundabout.

Really stupid pig jokes. Your kids and grandkids will like these.
How did the pig go on holiday?
The swine flu

Swine flu isn't a problem for pigs, because they're all going to be cured anyway.

The first sign of pig flu is you come out in nasty rashers.

This little piggy went to market,
This little piggy stayed at home,
This little piggy had roast beef,
This little piggy had none.
And this little piggy had influenza A virus subtype hemagglutinin protein 1 neuraminidase protein 1.

What do you call a pig that does karate?
A pork chop!

There were 5 pigs. They went to a restaurant. When the waitress took their order, the fifth pig kept ordering water. On the way out the waitress asked why he kept ordering water.
He said ,"Well someone had to go we,we, we all the way home."

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads on this site. Thus I cannot endorse, though some look interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Michael's business school tuition. Read more about Google AdSense, click here and here.