[NoWorries]

This has got to be near record-breaking territory! This is no ordinary rally.

What is pushing this?

[chrispi]

Looks like Saudi is recycling petrodollars...

[misterno]

Think about it

If Dow is up 300pts cuz oil is down say 4 dollars, what is gonna happen when oil hits $300/brl?

That is called disaster.

[r101958]

I believe the petro dollar reason. It really has to be for some reason other than the 'Good' new about the quarterly results or the financial sector. If it is only reaction about the 'good news' then there are many a stock market analyst out there living in the Land of Oz. Here is an example of the 'good' news today...:
"In yesterday's statement, Merrill said it agreed to sell $30.6 billion of
collateralized debt obligations -- the mortgage-related bonds that have
caused most of the firm's losses -- for $6.7 billion. The buyer is an
affiliate of Lone Star Funds, a Dallas-based investment manage.

Merrill will provide financing for about 75 percent of the purchase price,
according to the statement. The financing is secured only by the assets
being sold, meaning Merrill would absorb any losses on the CDOs beyond
$1.68 billion.

Bank of America Corp. analyst Michael Hecht estimated Merrill will report a
full-year loss of $11.55 a share......."

....let me see....this means Lynch is financing most of the loan to the
company that is buying their bad debt....hmmmm....sounds like really great
news.....naaaah! couldn't be another way of hiding the rest of the debt by
playing hot potato....

And this is news that has caused the stock market to rebound......(that and oil going down a bit)

does this all seem contrived to placate the masses?

It is either the PPT at work or some group, that doesn't care about the data, making lots of money (every other day) as the stock market goes up and down 2-3%. It may be both. I'd be interested to know how much money is transacted on a daily basis in the markets. Anybody know?

[CarlosFerreira]

I've read the Saudis (among others) receive payments for oil in dollars and buy US bonds, therefore keeping the economy moving. It's OK, the US economy keeps rolling and everyone gains some from that. They're gaining their margins, no harm done.

Now: how does this translate in the stock markets?

For all I know, someone could have been on the loopy juice just last night!

[NoWorries]

Well, the Merrill news is one thing, but the litany of bad news extends much farther (as we well know).

What strikes me is not so much that the market is up in the face of all the bad news backdrop (although that's peculiar enough), but the fact it's up by about 300 pts. I mean, that's a massive rally for one day.

I just don't see the logic. Has there been a piece of really good news released today that I completely missed in the newspapers? If not, what on earth is the market reacting to? It must be reacting to something.

You don't get a big rally like this for no reason at all.

[r101958]

NoWorries:

No.....I was watching all day....the Merrill news was the big headline....on top of the one article said that this could be the template that is used by all the other banks etc.....what a farce.

I was just thinking a far fetched thought....wouldn't all the money made on 2 or 3 % gain/loss on the market somewhat offset the loss realized by lowering oil prices to a more palatable level. For instance by reassuring the markets that you are going to increase production or some such.

[joeltrout]

You forgot the DOW dropped 240 yesterday. So up 300 isnt that much.

Apparently you haven't been watching all the volatility in the markets lately. Nothing surprises me in these markets.

joeltrout

[r101958]

I watch the markets daily....probably too much. In my opinion the down side is called for...the up side is not. However, somebody is making quite a bit of money from all the volatility. It certainly isn't the 401k folks. The was absolutely no reason for any up side today...except for a fall in oil prices.....and if it is that then it is irrational exuberance.

[joeltrout]

The was absolutely no reason for any up side today...except for a fall in oil prices.....and if it is that then it is irrational exuberance.

Consumer confidence was up more than expected today. That is great news. Then add a big drop in oil.

joeltrout

[alokin]

Joeltrout, there is really something strange recently, market up, dollars strengthens and oil falls I am really not an economic expert (before POI never ever read economic news), but this seems to meso strange.
Especially that the facts didn't change, I mean the depth, the housing market, etc.
You think that the Saudis, China and India keep the US economy going for some reason?


For me all this is bad news. Because if markets recover and oil price goes down soccer-mum and Joe sixpack never will get it. I guess we're very close to a cliff especially of Global Warming, maybe of oil production and of other environmental disasters. The sooner live does not go on as usual, the sooner people may ask what's wrong?

At the moment it seems that live goes on as normal for another...?

[r101958]

Consumer confidence 51.0 increased to 51.9.....wow!....irrational exuberance......or...grasping at straws.....that 0.9 increase probably reflects the 4th of July holiday....lol

[joeltrout]

You have to look at it in different terms. Wallstreet trades news.

If news is bad but not as bad as everyone expected then it is great.

I know it doesn't make sense but it is the way Wallstreet works.

joeltrout

[Homesteader]

The was absolutely no reason for any up side today...except for a fall in oil prices.....and if it is that then it is irrational exuberance.

Consumer confidence was up more than expected today. That is great news. Then add a big drop in oil.

joeltrout

I wonder how much of this increase in consumer confidence is due to the decline in gas prices. It wouldn't surprise me. Analogous to fool's gold.

[nobodypanic]

i agree i think the market's absolutely wacky, but it seems to me that @ some point, physical reality has to assert itself--doesn't it?

[BlueGhostNo2]

I would say allot of people are thinking 'recessions generally are priced into the market BEFORE the economy drops, the recovery is similarly priced in BEFORE the economy recovers.

Basically when they can see the light at the end of the tunnel - when they think they know which companies will not survive and which will... people will re-invest.

Now, imagine you are taking a historical perspective on this and not seeing some kind of 'new peak oil paradigm'. In that view a drop in oil consumption caused by demand destruction signals the way in which things can 'return to normal'. So people jump back in. Yes, I agree its crazy, but there you go.

[Micki]

Bear market rallies are often violent to the upside.
So keep an eye on volume. If it goes up like that but on low/average volume, it is likely a counter trend rally.

The market is however also due for a relief rally of a larger magnitude. So a lot of traders are standing ready to jump in again. Don't know if you noticed but technical analysis has been seriously back in fashion again the last few years. Those traders many times don't care what the fundamentals say, they just follow the charts.

Lastly, given the easy money some financial institutions get from Feds beggar window, it only makes sense they take it to the share market at some stage. Especially if they believe inflation rather than deflation is the name of the game.

[heroineworshipper]

Ubama stopped campaigning in Europe & got back to his own electorate for a change. Merryl lost only 78% on its debt sale, beating expectations by 22%. Definitely a triple buy.

[alokin]

I am not an economist - and will never be, so forgive me the stupid question: what represents the ups and downs of the indexes? The volume of stocks traded?

Mickey wrote:

So keep an eye on volume. If it goes up like that but on low/average volume, it is likely a counter trend rally.

If the DOW is not an index of volume which is the index of volume then?

[ColossalContrarian]

The rally will be short lived... the unemployment report comes out Friday.