Stocks Soar Despite More Bank Writedowns

Tuesdays have been very good for the market lately. 3 of the last 4 Tuesdays have seen these +3% rallies in the major stock indexes. Don't ask me why.

The bullish trends that I highlighted earlier remained in place all the way into the close, with the markets finishing at their highs for the session. Here are the highligts of today's session:

• Negative financial headlines didn't hurt the market
• The Nasdaq 100 spiked +4.1% higher
• Today was a 90% upside volume day
• Gold fell another 4%, breaking below the $900 level
• The Yen fell sharply vs. the dollar
• The volatility index (VIX) plummeted -11.4% to 22.68
• The ISEE remained very low at 72, highlihgting continued skepticism of the markets abilitiy to rally
• The technicals improved today, with the SPX breaking above its recent downtrend line

Volume wasn't spectacular, but it did rise on the day, making for an additional accumulation day. Banks and brokers led the rally today, rising +7.5% and +8.6% respectively. But all of the sectors were higher on the day. Actually, it was hard to find a stock that was lower.

How meaningful was today's action? Hard to say. I think it further supports the notion that the market can continue to bounce from its March lows. The market has been oversold, and pessimism has been off the charts. That gives this rally some room to run as those trends unwind.

But at some point, when the market gets oversold again and pessimism gets converted to optimism, the markets will likely have another correction. I still think that the March lows will hold, but I would not rule out a retest at some point this quarter.

But for now, I am looking for stocks to add to on pullbacks, and new areas of leadership to emerge.