Market pros in increasing numbers are eschewing the usual investing strategies and watching technical levels as their guides for making money. They examine temporary market tops and bottoms as guidelines when to sell and buy, and are in many cases utilizing funds rather than individual stocks to make their plays.

Earnings and economic data have proven unreliable to gauge the long-term prospects for the market, which has become a trader’s battlefield. Money that once stayed put for three to five years can now get moved in three to five days or sooner.

“What’s happening is people have learned that if you don’t take a profit it goes away,” says Kathy Boyle, president of Chapin Hill Advisors in New York. “Even somebody who’s really biased towards buy-and-hold is giving up.”

The phenomenon has been on display markedly since earnings season kicked into gear this month.

More than half the company’s in the Standard & Poor’s 500 have beaten earnings expectations, yet the stock index has dropped nearly 7 percent.

The economic data, meanwhile, have been close to expectations.

Friday’s report on fourth-quarter GDP was actually better than what Wall Street predicted-though at a 3.7 percent drop, the numbers were hardly encouraging.

But investors seem to be ignoring the data.

Instead, they’ve turned towards more of a trader’s mentality, pushing the Dow back up when it approaches 8,000 and the S&P; when it falls near 800. It’s a trend that bucks the traditional long-term horizon most investors are supposed to take, but for many it’s working.

“The idea of saying valuations are historically low so we’re just going to buy and hold, that comes at great peril over the next year or two,” says Lee Schultheis, founder and chief investment strategist at AIP Funds in Harrison, N.Y. “But also being overly bearish might also come at peril if the government’s able to get ahead of the curve on the liquidity-credit issue. Once that gets solved equities will have the opportunity to advance.”

Indeed, Boyle has moved nimbly in and out of positions in exchange-traded funds–these days mostly those with a bullish look on the market. She expects a run higher for the market to last into mid-February, when stocks will move lower and Boyle will quit or reverse her positions.

We’re getting $800 billion in stimulus and $1 trillion more to get rid of bad loans.

Yes, good times are right around the corner. Wait for it.

We’re going to feel good soon.

Until then, here’s a set of questions and thoughts to chew on:

What’s all this fuss about starting a “bad bank”? Don’t we already have Citigroup?

Will the new bad bank get a brand-new $50 million jet, too?

Speaking of jets, does U.S. Airways pilot Chesley “Sully” Sullenberger, who saved all 155 lives in an emergency landing on the Hudson River recently, know anything about mortgages? We could use a soft landing.

Could Sully climb into the cockpit of Citi 1, finish that flight down to Charlotte and rescue Bank of America Corp. CEO Ken Lewis by showing him how to use a parachute? He may soon need it.

It seems Lewis shops at Ikea, but does he eat the meatballs?

By the way, does this mean former Merrill Lynch CEO John Thain isn’t going to be on MTV’s “Cribs”?

Moving to Davos, considering how well past forums — which included such luminaries as Thain and former Lehman Brothers CEO Dick Fuld — have prepared us for economic challenges, who’s presenting this year? Alleged bilker Bernie Madoff and rogue trader Jerome Kerviel?

If Wall Street bonuses totaled $18 billion but the industry showed a net loss of $35 billion, as the New York state comptroller’s office said Wednesday, does that mean bonus payouts will double next year if the industry loses $70 billion?

What does it say about the state of the strategic merger that Pfizer Inc. is willing to pay a total consideration of $67.1 billion for Wyeth but Dow Chemical has cold feet about its $15.3 billion deal to buy Rohm & Haas Co.?

Nouriel Roubini and others are calling for a nationalization of banks and as much as it pains me to say, I agree. We either have the choice of being Sweden or having our lost two decades like Japan. If we go with the bad bank model, you can rest assured we are going to have zombie institutions probably until 2020 since there is so much crap on the balance sheet of banks. Take a look at some Real Homes of Genius and see if you are comfortable taking these mortgages onto your balance sheet. The reason the market has been rallying recently is because of this absurd notion. It isn’t because jobs are growing. They are accelerating on the downside. It isn’t because of earnings. Companies are missing left and right. This rally again ignores the silent depression of the vast majority of Americans while catering to the small crony capitalist group who argued for supply side economics and thinks this is a great idea. It isn’t, at least not for 95% of the population.

Now why is nationalization a better use of money? Well first, we are much too far down the road to discuss hands off policies (even though I advocated for this long ago because I knew things like TARP and Ben Bernanke’s nutty work were simply money being flushed down the toilet). First, with nationalization we own the banks flat out. We can then do the following:

-Shareholders get eliminated

-Bondholders get eliminated

-Management gets the boot

-Then and only then, do we separate out the good and bad assets. The good assets we try to sell them off to the market. The bad assets, we assess and slowly process a pricing model and get rid of them. Yet we know since the ownership is now ours that we’ll try to mitigate the loss for taxpayers. Right now with TARP and possibly the bad bank, banks are trying to off load as much of the crap at the highest cost to taxpayers while keeping the caviar assets all for themselves.

-This will get credit moving again because now instead of absurd capital injections, banks will now need to lend money because guess what, we freakin own them and we can decide whether we loan or not!

There is nothing more preposterous than a bad bank. It falls under the SIIV mentality that each progressive bail out gets dumber and dumber. In fact, this notion was what made the TARP fail during its first round. The idea that banks were going to dump the most toxic assets on the backs of taxpayers. Here we are, discussing that damn idea again.

Let us nationalize it and be done with it. Will the market feel pain? Yes! But those who face the most pain will be the banks and Wall Street who deserve it anyway. Wall Street is so disconnected from Main Street that they don’t realize that half our country is already struggling with hard economic times, even before the bust. We already know that they are not looking out for you and if you spend 2 seconds to think about what I just discussed, you’ll understand how horrible a bad bank would be. It is a one-way ticket to a Japan like recession and why are we to expect a different result? Keep in mind that in Japan they had a much higher savings rate which is buffer we do not have. If you think Japan is a picnic think again:

“Over the last few years, temporary employees have gone from being a rarity in Japan to accounting for one-third of the workforce of 67 million. They enjoy far fewer protections than full-time workers — placing their necks squarely on the layoff chopping block.”

We are already seeing the part-time number of workers jump into the stratosphere. Interestingly enough, Japan’s lost decade came after a real estate and stock market bubble. Sound familiar?

So going back to how this interconnects with the paradox of thrift, we are now spending taxpayer money through our government. Not all of it is bad but certainly the TARP and bad bank are horrific ideas. The money we are spending is on the backs of future generations. So much damage has been caused over the last 30 years with acceleration this past decade that we will have years to get this thing back on track. Americans are only now starting to save more (a little) because their credit has been shut off. That is it. That was the end game.

Anyone thinking we’ll be back to the old spending ways when you can get access to your HELOC with one phone call or simply buy a new car every two years is smoking purified financial crack. Those days are gone. The days of zero down NINJA turtle loans on homes are gone. I say good riddance. They have led us to this cliff and have rewarded corruption, greed, and the destruction of our country’s financial stability. I think it is apt to remember what Thomas Jefferson once said: