I’ve been thinking a lot about Thursday’s upside explosion on Wall Street, and the Federal Reserve’s ability to move markets. Abe Lincoln supposedly said, “You can’t fool all the people all the time.” I might add: “You don’t have to — a majority will do.”

Bernanke’s $600 billion QE2 program clearly smacks of a desperation tactic, ill grounded in economic theory or historical experience. Over the past 10 years, Japan has repeatedly failed to spark its moribund economy by monetizing government debt. Why should the same gimmick work here?

Already, Bernanke’s sidekick at the Fed, Kevin Warsh, is critiquing the policy (in diplomatic terms, of course).

For now, though, the objections don’t really matter much. What matters is that Helicopter Ben has convinced a majority of investors (a majority of those still playing the game, anyway) that he won’t let the stock market fall. That’s all it takes, at this stage, to push share prices up.

The market took a minor break from its torrid rally today, with the Dow off 37 points. But I suspect QE2 euphoria will lift the blue chip indexes to additional new post-2008 highs in coming days and weeks. With the head of steam stocks have now built up, pullbacks will likely be limited to -2% to -4% until January, at least.

From our perspective as long-term investors, the main question is how high the market can rise in 2011. I’m establishing a preliminary target of 1300-1350 on the S&P 500 as the peak for the year.

In other words, I believe the blue chips could climb about +8% from here (plus about +2% in dividends).

However, it is important to be exceedingly careful with new purchases. When the Fed-induced bubble bursts, poorly managed or heavily indebted “junk” companies will take it on the chin.

Right now, I suggest focusing most of your buying on world-class consumer-staples franchises — businesses that furnish the necessities of life, such as food and beverages, such as PepsiCo (NYSE: PEP). Since last week, there have been several chancesto pick up the shares at or below $65.

Restaurant supplier Sysco (NYSE: SYY) came in with Q3 earnings this morning that met Wall Street expectations. However, some analysts were apparently disappointed that SYY found it necessary to kick in $15 million more into its pension plan this year than a year ago.

I’m not worried; better to make the extra pension contribution now and get the money growing. At Monday’s close, SYY yielded +3.4%, providing a nice cushion against market volatility. Buy the stock, on a dip to $29 or less.

Gold jumped to another all-time record close Monday of $1,403 an ounce in New York after World Bank president Robert Zoellick suggested that the Midas metal ought to be included in a global “co-operative monetary system.” Wow! A bureaucrat endorsing the gold standard (at least in a somewhat modified form).

If you own gold, you should certainly hang on to it while this story plays out. Bear in mind, though, that if some kind of binding gold standard were actually adopted, it would likely mean the end of fiat money (and the end of rising gold prices).

So the climax of gold’s long run may be near. But we’re not there yet.