You've got to be kidding. No bad news? Merrill missed their OWN earnings loss estimate five times over and is still being shady about their holdings and hedges (and mind you, Citigroup and BofA have MUCH more exposure to subprime than Merrill). Existing home sales well below REVISED estimates. Dollar at the lows, commodities at the highs. Massive oil draw against an expectation build. Then something like 50 million spider shares get bought on a rumor to close the market close to flat??? Come on, be realistic. This wasn't a real short squeeze, this was a cover by all the shorts on an obvious rumor which a few big players KNEW to be true an initiated with a enormous market buy at the lows. You can't argue with 40 bps drop in 10 yr UST yields that there is a fundamental reason for this market to be lower...
Did I forget to mention the 430 trillion dollar derivatives market (global GDP is about 70 trillion) facing a large calamity if these funds are forced to sell in order to stem losses?