And On The 6th Day-- They Rallied
Nice finish to the market today. This morning, when the market was down -300 points, I pinged a trading buddy of mine and asked him if anyone thought that the market could actually finish higher today. He laughed.
But the market soon began to trade higher, as it looked like the sellers had finally exhausted themselves. The financials had been higher all day, and more stocks began to participate.
When the news came out that some NY regulators were looking to provide aid to the ailing mortgage insurers, the market took off. By the time the closing bell rang, the Dow had rallied a cool 600 points (from the lows) to close at its highs.
The bank index rocketed +8.0% on the day, while the brokers rose +6.9%. And the homebuilders spiked +9.5%. Wow. Volume was substantially higher today, which makes the reversal stand out more. This market has been very tenuous, but normally the strong volume would make me believe that the rally has some legs to it. We will see.
It would be nice if the ECB would get on board with their rate cuts. One can wish.
Also, the Yen hit new highs today before reversing lower. If we could see the Yen come down sharply, that would really add some fuel to the fire. The put/call ratio has been high for weeks now, so there is a lot of position unwinding that could exert upward pressure on the market. But don't expect the bears to give up easily, they still have a lot of firepower.
I'm off to a late meeting, have a great night--