Honk your horn: GM goes public again! OK, it helped that the Philly Fed yesterday morning gave an upbeat assessment of manufacturing activity in the Middle Atlantic states. In truth, though, the hoopla over GM’s successful initial public offering was all the bulls needed to jolt the stock market higher yesterday. At the closing bell, the Dow had leaped 173 points.

How can the market turn on a dime from near panic only three days ago? It’s the new world of investing, my friend. Better get used to it.

The hedge funds who dominate Wall Street trading nowadays are incredibly trigger-happy. If just a few of them sense trouble, their selling can unleash an avalanche of “get me out, too” orders in the blink of an eye.

By the same token, if a knot of well-heeled hedgies decide there’s enough good news to justify betting on the upside (for the near term, anyway), their buying can provoke a stampede of the bulls — as we saw yesterday.

Trading these daily lurches is next to impossible. Therefore, I focus mainly on trends that might endure at least a month or two (and preferably a year or two!). From that point of view, today’s rally looks like part of a topping process that began early this month when the Standard & Poor’s 500 index marginally broke above its April high and then turned down.

The recent pullback halted right where I advised you it could — about 4% below the November 5 closing high. Now the market will try to run back up toward resistance around 1227 on the S&P.

Another marginal new high for the year is possible within the next week or so. However, I would then expect a deeper pullback (probably 5% or more) that could offer some excellent buying opportunities. Patience!

Meanwhile, in case you’re wondering, no, I’m not recommending the new General Motors (NYSE: GM). I’m still concerned about the company’s pension liabilities, which could put a drag on GM’s profit recovery over the next three to five years.

As of September 30, GM reported unfunded pension liabilities of $29.4 billion — almost half the company’s post-IPO market value. That’s a huge risk, conveniently overlooked by the talking heads on financial TV.

For now, I suggest funneling your idle cash into bonds, particularly munis, rather than stocks. Yesterday, the muni market regained some of its composure, with long-term tax-exempt paper tacking on about half a point (despite a drop in Treasury prices).

Among the taxable munis, PowerShares Build America Bond Fund (NYSE: BAB) also moved up a bit, but not as much as its tax-exempt rivals — probably because a slew of state and local governments are rushing to issue Build America bonds before the statutory authorization for these instruments expires Dec. 31.

Take advantage of the temporary glut to nail down the handsome 5.4% (taxable) yield BAB is currently throwing off. Pay up to $25.50.