Will It Hold?

Dow futures are up over 250 points this morning.  Along with that, gold up over $14 per ounce, oil up $1.6, and interest rates going up a lot.  So, we know we’ll open up, but will it hold.  This will be a great test for the market.  I wrote yesterday that Treasury Secretary Paulson’s plan is a step in the right direction, but not the solution.  Things aren’t going to get better overnight.  But, the economy is where it is directly because of the housing market.  So, by doing something to help the housing market and stabilize it in bailing out Fannie Mae & Freddie Mac, we’ll see some stabilization in equity markets as well.

The test isn’t at the open.  This is a knee jerk reaction.  The real test will come later today or even later this week.  Will we rally on heavy volume?  Will most of the volume be upside volume?  Will we see several days of a persistent rally?  Nobody knows at this point.  I think everyone knew this was coming.  The Treasury basically told us this several weeks ago.  But, the market is relieved it finally happened.  So, don’t get too fancy this morning.  We’re still in a market where there is a high degree of whipsaw risk.


I had such a positive response to my comments regarding politics, I’ll be adding more in occasionally as I see fit.

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September 2008
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