What is up with this rally?

Quote from Ivanovich:

Not that I care, but it's not following any of the logic it has followed in the last few months. Carry trades are selling off, metals, too. 10 year is still up as well...This, in addition to all the bad news out there coming across the feed. The retail sales numbers weren't even that good when you dive into them.

Yet the market is up on...?
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It simply means that all the bad news is now reflected in prices, the market is short term oversold and there will be a short covering until buying subsides.

I wonder why you are asking. This is so basic. Whoever did not buy yesterday during the day or MOC does not know how to trade.

Ron
 
Quote from ronblack:

It simply means that all the bad news is now reflected in prices, the market is short term oversold and there will be a short covering until buying subsides.

I wonder why you are asking. This is so basic. Whoever did not buy yesterday during the day or MOC does not know how to trade.

Ron
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I appreciate your response. I know this is probably another dumb question, and it's probably very basic, but maybe - due to your high intellect - you might dazzle me further. How is bad news that came out this afternoon baked into a market move that occured this morning? Perhaps time travel is the root of it?
 
Quote from MAESTRO:

I think there were more buyers then sellers, no? :D
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Ah, that ol' gag! Curses!

On another, more serious note, this was interesting...

San Francisco, February 13th. Just after the stock market closed, S&P announced that they are mostly "unfavorable" actions on US mortgage insurers and subsidiaries. These include revising the outlook for Genworth Financial from stable to negative. PMI Group has been placed on CreditWatch with negative implications and has lowered its rating on Radian Group and may cut further. S&P has also put Triad Guaranty Insurance Corp on CreditWatch with a negative outlook with a negative outlook for United Guarantee Corp as well.
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I wonder if this was baked in this morning too!
 
Now that is a Fantastic piece of news! Good find! Definetely food for thought here. Sorry for the previous joke, could not help :D
 
If any major index breaks its Feb. 1 high, all bets are off. In that case, you'll have a

A) capitulation bottom (Jan 22-23)
B) Followed by a small rally (peaked Feb 1)
C) Followed by a retest of the low (last week. which didn't come close to the January lows)
D) And then a higher high (such as S&P > 1400)

This is the pattern that ends most corrections and bear markets.

Even if that happens, I wouldn't be surprised to see another 1 or 2 retests of the lows in the late spring, summer or fall. It could be a good year to swing trade both directions at the extremes. But the strong bias for shorting/"sell every rally" will be gone.

Quote from S2007S:

SELL THE RALLY.


Last time the dow ran to 12700+ everyone was thinking theres nothing wrong with the economy, days later the markets dropped 5%+. Sell the rallies buy the sell offs, simple as that. The economy didnt get better because the dow rallies 150+ points....

:p :p :p :p
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The market doesn't go straight up or down.
This is a bear market rally.



Quote from Ivanovich:

Not that I care, but it's not following any of the logic it has followed in the last few months. Carry trades are selling off, metals, too. 10 year is still up as well...This, in addition to all the bad news out there coming across the feed. The retail sales numbers weren't even that good when you dive into them.

Yet the market is up on...?
More...
 
Quote from 1flyfisher:

The market doesn't go straight up or down.
.
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True pearls of wisdom in this thread!

A bear market rally? I refuse to believe that is the reason. There has to be a fundamental reason a bit more specific than "bear market rally" and a bit more specific than "more buyers than sellers."

Heh...you guys kill me. I could have just made a post that said 100% up room to go $$$!! and been done with it. I'm just trying to spark up some conversation. Meaningful conversation, that is. I guess that's where I went wrong! :)

My next post will be all about PAL and SWC and how they're going to triple digits. That seems to be the only type of post that works around here!
 
I think this is largely options related and am playing along until Friday with tight stops. Will sit out the weekend and wait to see if the rally has legs going in to next week. There is a lot coming up in the credit markets in the next two weeks and it will be hard for equities to ignore what looks to be reprcing of a lot of corporate debt from the 4-6% range to the 15-25% range. Such a significant repricing could cause some real problems for some low collateral spreads so there is that potential fall out too. Cost of doing business has just gone up substantially and wether it is temporary or something that will last longer than a quarter is far from clear at this point.
 
Quote from Mvic:

I think this is largely options related and am playing along until Friday with tight stops. Will sit out the weekend and wait to see if the rally has legs going in to next week. There is a lot coming up in the credit markets in the next two weeks and it will be hard for equities to ignore what looks to be reprcing of a lot of corporate debt from the 4-6% range to the 15-25% range. Such a significant repricing could cause some real problems for some low collateral spreads so there is that potential fall out too. Cost of doing business has just gone up substantially and wether it is temporary or something that will last longer than a quarter is far from clear at this point.
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I'm inclined to agree. If what you say is true, then there should be quite a sell-off on the horizon.
 
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