For now, the market is celebrating the various government actions that are being taken to save us. I'm not sure that market players are all that confident that these are going to be effective solutions to our economic ills, but the fact that many want to believe it is enough to get us moving to the upside. We are climbing the slope of hope of today but it may of course become very slippery very fast.
News that the Obama administration is considering a "bad bank" program caught many market players by surprise and caused a sharp gap higher to start the day. With a FOMC interest rate announcement pending and a lot of trapped shorts, the bulls kept the pressure on all day. The Fed announcement offered nothing new, but the bears attempt to turn us back down was thwarted by some of the typical late buying we have seen lately.
Financials obviously led to the upside but breadth was excellent with only gold and bonds to the downside. Volume was mediocre but still sufficient to give us a technical "accumulation" day.
Are we now overbought? Probably. We did clear some technical resistance in the major indices at the 50-day simple moving average, but this was not a particularly impressive breakout move. I suspect many shorts were squeezed out today and will be looking to reposition themselves fairly soon. Should be an interesting couple of weeks.