Today was one of the most irrational days I have seen in several weeks. Something somewhere had to be wrong. If you are a bull you will cite retail sales (which were not horrid but really not that good either) and the jobless claims. Neither of these in my opinion should have sent the markets up close to 2%. Then you combine this with Oil being up $5.50 a barrel, agriculture commodities shooting through the roof, more inflation chatter from the Fed, and MBIA and ABK were downgraded and it really seems silly.
I said yesterday I thought the impact of MBIA or ABK would be substanial less that in February but it definitely should not have been a bullish catalyst. It is not as big of an event as it would have been in February. It is still an event and not a non event!! Banks will have to take additional losses. They insure over a trillion dollars of securities.
For the most part it did not matter what was being sold it was being bought. Even transportation was up today as oil screamed higher. The markets obviously believe the big employment number tomorrow is going to be better than expected. Considering how hawkish the Fed has been recently the market is probably right. If, I think this is a big if, the markets bust through 1410 I will have to rethink my thoughts that the markets have found an interim top and will move lower.
Like I said at the beginning of the week this week is crunch time. In the short term tomorrow will determine alot. We have just chopped in place all week. Tomorrow's employment number could be the catalyst to shoot us higher.