Impressive rally

Just after my last post, stocks took off gaining 200 & extending their recovery to 2 days led by a major rebound in beaten up financials & sharply lower oil prices. Dow was up 207 extending the 2 day gain to almost 500, advancers ahead of decliners 5-2 & NAZ was up a more modest 27. Volume was much higher at 1.97B, noticeably high. The VIX (volatility index) was essentially even at 25.01, still at a very high level. There is thinking that the (pretty much) record rebound in financials is related to tightening on shorts. With naked shorts for financials not allowed, there may have been a rush by those affected, among others, to buy back. Plus there was a sigh of relief for the financial community. Even heavily hammered FNM, FRE & LEH came roaring back. The market rebound was also encouraged by what they call fairly "good" earnings reports by Dow Stocks: JPM, KO & UTX, although I view them as not so great.

With all the excitement in recovery for financials, the sharp fall in oil prices has been less noticed than otherwise would have been the case. Oil fell from 145s to under 130 in just 3 days.

CLQ08.NYM" CLQ08.NYM Crude Oil Aug 08 129.84 3:56pm ET
down 4.76 (3.54%)

With the decline in oil prices, not to mention oil & related stocks, MLPs have pulled back to a new 52 week low.

Alerian MLP index:






The close today was 262.01, a new low by pennies. This weak performance does not bode well for the short term.

There were a number of of biggies reporting after hours. Google (GOOG), I love them, now down 40 (8%) on slowing "click" growth. IBM (IBM), a big Dow stock, reported favorable earnings, down 84¢ after hours. Merrill Lynch (MER) report a 4.97 EPS loss (worse than imaginable), down 3 or 10% after hours. They have a lot to explain in the conference call. Microsoft (MSFT), another Dow stock, reported favorable sales but earnings 1¢ shy of forecasts, down 1½ after hours. The general tone of these biggies seems negative, let's see how it plays tomorrow.