NEW YORK (TheStreet) -- Throughout the financial crisis I argued that we were in good handswith Ben Bernanke guiding the economy. I believe those who concludethat the efforts of QE1 were a failure are 100% wrong. The primary purpose of the Fed is to stimulate confidence in times of economiccontraction and to temper inflation in times of economic growth.

As much as we all want to believe that our economy is built upon a rockof fundamental safety, it is not. All economies do well in times ofconfidence and suffer from the lack thereof. Bernanke understandsthis and has consistently been able to provide the economy with joltsof confidence when it needs it most.

QE1 policy was the reason weavoided a Depression. Although it didn't propel us to high growth orresult in a return to lower unemployment it did put a stop to the freefall of both data points. That in and of itself was a big, big deal.

Now we get QE2 at a time when the recovery had stalled. Stage one ofthe market recovery lasted from the March 2009 low until the end ofthe year. Stage two of the market recovery could never get off theground. It has been stuck in neutral (tight trading range) for 10months as housing, unemployment, eurozone crisis, tight lending,etc... keep a cap on the cycle. Read here the words from Mr.Bernanke himself regarding QE2.

This is a man who is in tune with the economic confidence of ourcountry. The stock market obviously approves of the plan he has comeup with. Stage two of the market recovery has officially commenced,thanks to QE2.

Before adding to current positions we wanted to seeconfirmation that the market agreed with Bernanke's actual plan and wehave gotten it. This is now the stage that brings us back toward the2007 highs of Dow 14,000.

This is a stage that allows Apple ( AAPL) to reachthe lofty projections of analysts who put a 10-month "bull case" price target of $500 on the stock based on better-than-expected demand of Apple products; Morgan Stanley analyst Katy Huberty's forecast is 80 millioniPhones and 40 million iPads sold in CY 2011. A stock like Appleneeds solid market footing to be able to make that kind of a jump andit appears Bernanke is laying the foundation of confidence brick bybrick.

We are buying a 5% allocation of AAPL February 2011 calls, a 5%allocation AAPL January 2013 calls and a 2.5% allocation AAPLDecember 2010 calls. This takes our cash to 41% of theportfolio. Excellent job by the Chairman!

At the time of publication, Schwarz was long AAPL.

Jason Schwarz is an option strategist for Lone Peak Asset Management in Westlake Village, Calif. He is also the founder of the popular investment newsletter available at www.economictiming.com. Over the past few years, Schwarz has gained acclaim for his market calls on the price of oil, Bank of America, Apple, E*Trade, and his precision investing in S&P 500 option LEAPS. His book, The Alpha Hunter, is set to be released by McGraw Hill in December 2009.

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