That conversation was imaginary. But it's not so far off the mark. So what do you do here? Who do you believe? Participant No. 1 or No. 2? Here's what I'm doing.

The market has become so analyzed that I believe it's a good idea to take a step back and focus exclusively on weekly and monthly charts because they serve two functions: First, they remove the daily volatility and second, they provide a more important depth perspective for what's going on. Weekly and monthly charts provide, in some respects, an overhead view. So with that overhead view, here's how I'm playing the above conversation.

The target/resistance level for the S&P 500 is 1325 and for Nasdaq it's 2500. As everyone already knows, the Dow Jones Industrial Average has resistance at 11000 and up to the old highs. I don't think the Dow makes a new high, but it probably punches up to 11250 before running out of steam.

If the Fed is going to reinflate, then the 10-year note price is going to have trouble at the 106 level. I'll use rallies to the 106 level to lighten positions because I don't believe the corresponding yield is going to move below 5% (currently 5.186%).

Besides, I checked the yield of the 30-year Treasury bond (I have more data for the 30-year vis-a-vis the 10-year note) and here's what I found: Its year-to-year percent change has rebounded from the minus 20% level, and since the early 1980s such a rebound in the rate of change for the yield means the bond (or in this case the note) has difficulty over the following year.

If the Fed is going to reinflate -- and the 10-year note is going to come off (its yield will rise) -- then interest-rate sensitive stocks should underperform and gold stocks should continue improving.

The most important stocks for me are Fannie Mae (FNM:NYSE - news - boards) and Freddie Mac (FRE:NYSE - news - boards), the housing sector, and -- I know it will be like catching lightning in a bottle -- gold stocks.

Weakness in Fannie and Freddie and the housing sector will give insights as to the seriousness of the rally in the yield of the 10-year note. A rally in gold stocks will do the same, but as of right here, talking about gold stocks will still get you a "When did you stop doing acid?" look.

Despite the big move in most tech stocks since early April, I don't believe we're on the cusp of a major secular tech bull market. As a result, I'm going with Micron Technology (MU:NYSE - news - boards) as my tech bellwether. Since I don't believe tech is on the cusp of another secular bull market, then it makes some sense, at least to me, that tech stocks should act more rationally (i.e. not like moon-shots).