Today's Markets

Wow -- we finally have a rally that holds in 2008. It was bound to happen sometime, but still it has taken awhile.







All of the chart have the same pattern. In the early afternoon, they broke through resistance on heavy volume and closed at the high point of the day. In addition:

There is not a specific headline that accounts for the spike, but there is strength in some of the bigger financial names, including Merrill Lynch (MER 59.73, +1.56) and Morgan Stanley (MS 47.32, +1.19).

In other words, this looks and feels like a purely technical bounce as opposed to a fundamental news driven event.

However, let's pull the lens back and look at the trading so far this year.



The SPYs are still clearly in a downward moving pattern, although a strong opening tomorrow with follow-through during the trading session would reverse that trend. Also note there really isn't a strong reversal formation on this chart. There is a possible "V" bottom but that could also simply be a lower lower in the pattern of moving lower.



As with the SPYs, the QQQQs are still in a downtrend as well. In addition, aside from a possible "V" bottom, there isn't a clear reversal formation.



Ditto.

It's been a terrible start to the year for the indexes. With more firms making recession predictions and more and more investors expressing concerns about the soundness of the economy I wouldn't expect that trend to stop. But I could be wrong.