Upon further review

After having moved up over 50% in just the past 8 trading sessions, the financial sector ran into some profit-taking Thursday. Strength in the energy sector wasn’t enough to overcome that selling, so the market closed about 1% lower.

The Dow Jones ended at 7400, off 85 points. The NASDAQ closed at 1483. The S&P 500 declined to 784.

Oil was $3/bbl higher to $51. It rose on a combination of a weaker dollar and that thinking that the economy will be getting stronger. Gold advanced up to $959/oz.

Wednesday's actions by the Federal Reserve were due to the fact that the administration simply can’t get its act together with all its distractions. What the Fed has done is to monetize the debt which, effectively, eliminates concerns about deflation. It has also pretty much countered all the previous drops in monetary policy.

Short-sellers have to be wondering what hit them. They aren’t about to give up as the consensus – invariably always proven wrong – has it that more travail is waiting, so they’ll keep working to drive stocks lower – especially in the absence of new rulings about the uptick rule.

Here’s why they’re about to be bugs on the windshield of a resurgent market.

Significant changes are coming in the mark-to-market rules. This will help the banks regain their fiscal footing and improve the flow and availability of money.

Even before one dime of this spending foolishness or these new incentives actually hit the economy, the velocity of money has already begun to spin up. Retail sales reported for January and February have posted an annualized rate of growth of 10%. To me, this is just the start.

And, finally, the Fed is flooding the system with money. Given how undervalued the markets remain even today, the coming monetary tsunami will light the markets up – majorly.

Be prepared.

All this money and growing economy is going to have an inflationary result. The fixed-income safe harbors of the recent past will be crushed by this as yields rise and prices for existing issues drop.

A good place to look for benefit from this turn will be the traditional inflation hedges of gold, commodities, energy issues and, yes, real estate.

The best is yet to come…