“The big picture overall trend is still down and the market is still broken. Until that is repaired, rallies (even like the one we saw yesterday) are not to be entirely trusted.”
– Charles Kirk, “Calling A Bottom”, Thursday January 24, 9:10am EST
There is a lot of skepticism about yesterday’s huge afternoon rally. People don’t know whether to trust it. They don’t whether it’s the beginning of a sustainable rally or a bounce that should be sold before the resumption of selling.
Personally, I think that means that, if we can just get some more good news, the move has legs. That’s because many are still sitting on the sidelines or sold into the rally and can jump back in if things start to look (and feel!) better (S&P 1 Day Chart).
As far as news goes, we had some earnings reports from AT&T (T), eBay (EBAY), Qualcomm (QCOM), Nokia (NOK), Lockheed Martin (LMT), Ford (F) and Lennar (LEN).
The National Association of Realtors released December Existing Home Sales.
There is a story about $7 billion dollars in trading losses at French Bank Societe Generale (subscription required).
And the government is apparently going to hold a press conference about the stimulus plan at 1:30pm EST.
But really people are just feeling things out and trying to get their sea legs.