By Dave Fry, founder and publisher of
and author of the best-selling book
February 9, 2010
OVERSOLD RALLY & BAILOUTS
Rumors that Greece will be bailed-out of its current debt difficulties rallied stocks today. Obviously this has been an issue negatively overhanging markets. The bailout rumor began with word that ECB potentate Trichet left Australia a day early meaning to tea readers something good was going to happen. Germany denied reports of a bailout later in the day but bulls didn't flinch much. Further Moody's and S&P discussed more downgrades for sovereign debt including Greece. So we'll see.
Caterpillar rose on an upgrade from Morgan Stanley with the analyst no doubt taking credit based on the closing price the previous evening. Don't you wish you could do that? Coke jumped on earnings and McDonalds rose on international sales as euro levels helped. (I guess they don't have $1 meals there.)
But, markets were oversold and a rally was a definite possibility given conditions no matter the source. Volume was heavy today and breadth was quite positive.
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authorities are vexed by Moral Hazard issues in dealing with Greece since Portugal, Spain and Ireland are in similar predicaments. Nevertheless, the idea that something would be done got bulls pumped-up today at least. In addition equity markets were much oversold at least on a short-term basis as demonstrated by the McClellan Oscillator. Now they're not.
The market is still dominated by program trades and a lot of hot air.
Other than this I don't see much on the horizon unless Iran does something foolish on Thursday as they've threatened.
Let's see what happens and you can follow our pithy comments on
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Dave Fry is founder and publisher of
, Dave's Daily blog and the best-selling book author of
, published by Wiley Finance in 2008. A detailed bio is here: