How quickly things change…..
Some stats from today’s rally:
S&P: +54 (7.1%) to 823
Dow: +497 (+6.8%) to 7776
NYSE Up Volume: 1,866,836,012
NYSE Down Volume: 44,683,760
NYSE Total Volume: 1,914,836,622
It was just 2 weeks ago (March 9th) that the S&P closed at 12 year lows and the stock market felt like it was forecasting the end of the world! We’ve now rallied 22% in 2 weeks!
But if we look at the catalysts for this rally, they really don’t seem to justify such an explosive move. Citi said they were profitable in the first two months of the year and JP Morgan and Bank of America said they were too. The Fed initiated some serious quantitative easing. And now Geithner’s toxic asset plan this morning.
I agree with the Capital Spectator when he wrote this morning:
We’re skeptical largely because the rally this month has drawn power primarily from a new round of hope that Washington’s various experiments to right the economy will finally hit pay dirt. Perhaps, but it’s not the stuff that powers sustainable rallies, much less secular bull markets.
I’m a seller of this rally at this point…..