Citigroup spoke & traders listened

Stocks surged having their best day of the year. Dow rose 379 closing at the highs of the day, advancers over decliners 8-1 & NAZ was up 89. The overdo, vastly oversold rally was welcome to investors who are long. As impressive as it was, it only recaptured a portion of the damage done in just the last month. Now it's moving up to the first meaningful barrier, 7K.


Dow Jones Industrials --- 1 month




S&P 500 FINANCIALS INDEX had a great day benefiting from optimistic comments out of Citigroup (C). By way of perspective, the index returned to the March 2 level (down sharply from 168 at the start of the year).

Value 96.82

Change 13.05

% Change 15.6%

Other big gainers in the high yield sector were:

Alerian MLP Index_____up 6.61....4%
Dow Jones REIT Index_ up 12.89..15%
junk bond funds______up 5+%

Vastly oversold conditions can bring these kind of dramatic rebounds. At the same time, the VIX, dropped 5 or 11%.


Oil gave up early gains on a disappointing (for oil bulls) inventory report. It fell 1.30 off a 2 month contract high. An estimate by EIA for global oil demand in 2009 was reduced by 200K barrels a day from the forecast last month bringing global oil consumption 3M barrels a day below the September forecast. Gold had another bad day taking it below 900.

CLJ09.NYM

..Crude Oil ..Apr 09

..45.77

.. 1.30 ......(2.8%)

ZGH09.CBT

..Gold 100 oz. ..Mar 09

..894.70

.. 21.40 .....(2.3%)

• Oil gives up early gains on lower demand forecast- AP

Markets were given further encouragement by DC insiders. However, they have not been able to translate words into meaningful action lately.

•Geithner Says Obama Will Do `What Is Necessary' to Repair Damaged Economy

• Bernanke: "Good chance" recession could end this year- AP

Every stock I followed was in the green, quite a feeling. Citi soared to 1.45. Traders who bought Citi in the last week are happy but all other stockholders remain very unhappy. Markets will trade on reality tomorrow.