Some earnings news after hours yesterday send the market gapping down big this morning only for the bulls to make a strong come back and end the day on a solid note.  The market has been acting great recently. Bad news gets pushed to the side and any good news gets a ton of buying.    As I said last night, the dollar is making a move behind the scenes. Today was a strong day for the dollar and I think has given it that extra umph at the right time to get a serious dollar bull move going. This should be good for the stock market.    The other thing I wanted to touch on again is the financials. If you have bottom fished at a financial stock and your stock has NOT had a huge bull move in the last few trading days then that is a sure sign to GET OUT!    Again some that come to mind are LEH and DSL, I do not like the way these are acting and I see no reason another Financial company won’t go under.   until then, stay nimble!

P.S    A key pivot play may set up in the stock market soon so stay tuned!

Now that we have kicked off the week I wanted to do a follow up on last weeks weekly chart that was posted here.  We came down and tagged one of our weekly downtrend lines. Now the question was, and still is, was that a solid support level or is the true downtrend line yet to be tested?  We have bounced before in this bear market and came right down to new lows, will it happen again?     We kicked off this week with a slow light volume down day, however after hours reports from Apple and American express send the futures falling down in the after hours trading. As i type this the dow futures are down 100+ points.  Of course this doesn’t mean we open that way but it does usually mean we will see more volume and more action in tomorrows trading.    One thing I would recommend keeping an eye on is the dollar.  If the dollar can give some significant strength in the next couple days I would expect some short covering to send it in a decent size rally. This will be bullish for the stock market.   As far as earnings go, the financials have not given too much dissapointment letting me know that alot of the financial fears are baked in to this market. I think the big question many want to know is, will another large financial institution take a dump? Lehman, Wamu and Wachovia are a couple names that come to mind.   Fears like that are what can keep investors on the sidelines waiting,  these are the people that will come jumping into the market once they begin to feel they may have missed the bottom. Thats what can keep a short cover rally on the move.  

Well what a bullish day we had. Financials had a HUGE HUGE day, Oil fell another $5 and the dollar gained ground.  Is this the bottom?    Well to me this was a technical move but is a significant one. I do think the bounce will continue to give us a bear market bounce at a minimum.   One thing that did catch my eye was the volume in some of the financials. Concidering that financials are what lead the way today you would expect massive volume on this type of move. Some did have huge volume and others didn’t.  There will be banks that survive and I would imagine there will be more banks that join Indymac in the grave. On a day like today I would look at the banks that had HUGE volume as the banks that have the potential to survive and make out just fine.  I would view the others as stocks that just went along for the ride and maybe had some shorts covering.   I would keep that in mind if your ready to jump in and pick a bottom in these financial stocks.