In the words of the late, great Phil Rizzuto....HOLY COW!! The markets EXPLODED upward today. The DOW was up 936 points (an all-time record). It appears that the coordinated efforts that came out of the G7 meeting on Friday and from European leaders on Sunday to back up banks (2 trillion dollars in Europe) and free up the credit markets finally relieved some fears. This allowed the follow-through day to occur today in the markets after the wildly volatile day on Friday. The gap up held and it was steady buying throughout the day for 10-11% gains on most of the indices.
This DOES NOT mean it is the start of a brand new bull market. The market is only back to the point it was last Wednesday. But it certainly is promising. The healthiest thing for an intermediate term rally would actually be consolidation (a pull-back) for a couple of days. Today involved panic buying (people not wanting to miss the huge rally) just as last week was manifested by panic selling. The truth will come on a pull back. Will the sellers re-emerge? Will the bulls step up and defend the recent low? Will we put in a HIGHER low, and big the classic "stair-step" upwards? Then we will see. For now, let's call it a great day, and take it one day at a time. While the price action was bullish, this rally was way overdue. On the bearish-side, extreme governmental invention was needed to stave off disaster. The fact is, we still may be facing a pretty hard recession, and company earnings will likely be less than stellar for some time to come.