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Friday, October 3, 2008

My Mood Hits Bottom, Market Rallies

After my "doom" post of yesterday, we should have expected a rally today, and we got one, but a disappointing one,up only 30 on the SPX. Even though oil is trading down, the energy sector is up, and oil and coal stocks are having pretty big rebounds, as are the fertilizers. XLF is also up big today. Wells Fargo is taking over Wachovia. As you know, Bailout 2.0 is being voted on in the House, and it is not a sure thing. However, I think the market has already thrown it's temper tantrum and is probably ready to move on.

Despite the rally, there are no breakouts, and only 11 new highs, 9 on the NYSE and 2 on the Nasdaq. That's a pretty good sign of an oversold bounce.

In other news, Arnold Schwartzeneggar, elected Governor of California 5 years ago to solve the State'e financial crisis, has finally figured out how to do it. He is asking Paulson for a bailout.

Moral hazard? What moral hazard?

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