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A massive rally in US equities today led by financials as there was relief that Europe will be bailing out the sovereign debt of some of their members, and most importantly of all, the large European and US banks.
The US GDP came in well. Intraday commentary was provided, and it was a hollow victory as household income continued to decline.
I think the stock rally may have more to go, but it might take QE3 to take it much higher into year end. And if we do get QE3, we then go into bubble watch as financial assets inflate at the expense of the real economy.
This is what happens when one applies monetary stimulus to a broken economy.
One picture is worth a thousand words...
Buffaloed Tim and Howdy Bernanke
Another nice up day in the metals running a bit counter to commodities.
Gold finished around the big resistance of 1720. Today was a quiet expiration and it may be that the new holders of futures, compliments of their 'in the money' calls, will be given a gut check tomorrow or the next day.
But the news and the headlines from Europe are so dominant in this market that this is the primary driver, and most other things are secondary.
I put my own portfolio in a defensive position into the close. I will be out of pocket almost all day on Friday so there will be no updates until very late, or on Saturday.
A bit of a drift higher with a short squeeze based on a report (rumor) that China will ride in on a white horse and bail out Europe by buying their euro bonds.
This is a very mixed market and headline driven. So we wait for the next headline which is what it will take to fuel a sustained rally if it is favorable and substantial.
