Congrats to the bulls, you were long over due. The question now is will it follow through tomorrow and empower the bulls even further? The markets had a huge upside explosion from the get-go, ran hard all day, pulled back late in the afternoon but held support, and then came on to close at the highs for the day. The technicals on New York, in particular, were exceptional with a 90% plus day. Advance-declines were 2920 up and 225 down on New York, and 23 1/2 to 4 1/5, or about 5 to 1, on Nasdaq. Up/down volume was 2.1 billion up and 78 million down on New York, a ratio of about 25 to 1 or so, on total volume of 2.2 billion. Nasdaq had 2 1/3 billion up and 120 million down, nearly 20 to 1, on nearly 2 1/2 billion.
The rally was ignited by positive news from Citigroup, Pandit announced the bank has been profitable the last two months. Big whoop if you ask me. Bernanke also hit the airwaves and told us that the U.S. and the world didn’t do enough to solve the crisis, and promised that more kitchen sinks would be thrown at the economy. He’s on his ninth sink now and Home Depot has just given him a VIP Frequent Shopper card.
Barney Frank told us that he would talk to the SEC about reinstating the uptick rule and said he promised to revisit the discussion on mark to market accounting.When Barney finished speaking, I put away my raincoat and pulled a chart to see what the market did when they implemented the NO SHORT RULE. The chart above shows what the market did in September when the brilliant geniuses told us we couldn’t short certain financials at all, forget about on an uptick. The uptick rule may have been effective back in the day, way back, when stocks traded in eights and quarters, it will have zero impact as we now trade in pennies. Just another SEC fail, although it might dissuade short sellers like Jim Chanos from finding the next Enron, which he uncovered way before the pathetic analyst community on Wall St. did. If I ever get investigated I only pray to God that the SEC is on my tail. Talk about a choreographed manipulation to the upside. I honestly don’t have a beef with it, they had to do something.
The sell side guys that I know and respect that also manage huge accounts weren’t doing much today. I spoke to two of them and one was playing hangman and the other one was doing a crossword. I mentioned this today on twitter, but this in no way should be viewed as a negative, it just means the real buyers (not fast money short covering hedgies) really weren’t doing much. If this rally can follow through, that will change quickly and ignite significantly more buying.
By the tone of this post I think you know that I am always the skeptic, but I do respect Mother Market and I will trade what it gives me. This is probably a bad time for me to wax macro anyway, because the machine wants to rally—for now.
I hope you guys did well today. I was busy with other projects and I did one trade, it was a short–and I lost. LOL