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Since the 7% correction last month, stocks have shot higher coming close to highs for the year.  Consumer discretionary stocks have helped lead the charge higher with big gains recently in stocks like Macy’s (M), Brunswick Corp (BC) and Williams-Sonoma (WSM).

I’m a firm believer that the U.S. consumer will not, I repeat NOT, get back to previous levels.  It’s simply impossible.  Therefore, I’m very negative on these stocks like the ones mentioned above.  Nevertheless, these stocks have been on fire in recent days and weeks.

Maybe people are still buying crap because it seems nobody is paying their mortgage these days and banks are overwhelmed with the volume that millions of people are essentially living for free?  This allows these broke Americans to continue living the dream!  Even so, the numbers are not anywhere near where they used to be in terms of consumer spending.

I believe this rally will not be sustainable and eventually the reality will be evident that the consumer is not coming back.  Savings is in.  Paying off debt is in.  Spending and borrowing is no longer the path that all Americans are taking (although some still are).

Remember, stocks don’t reflect economic reality.  They reflect people’s perception of economic reality.  This perception may or may not be correct.  Invest with caution.

Disclosure: Short some of the stocks mentioned above.