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As expected, a huge up day finally came. I didn’t expect it to be one day after I called for it, but sometimes you get lucky.  The S&P 500 closed up 6.35%, financials closed up 16%, oil closed down 3%, gold closed down 2% and treasuries finished nearly 2% lower.  Unfortunately, we’ve seen this movie before.  This rally had all the telltale signs of a bear market rally.  Massive short covering, above average volume on a huge one day spike.  Investors are trying to credit this one to Vikram Pandit’s memo at Citigroup, but Mr. Pandit was not specific how much Citi would write-down this quarter.  Odds are that billion dollar write-downs are coming and Mr. Pandit is adjusting his outlook for it.  Regardless, the market was massively oversold and a relief rally was due.  I don’t think you can read too much into this.  All of the underlying fundamental problems with this market are still existent.  I pared my long side exposure after some outrageous moves today.  I would expect this rally to have some follow-thru, but don’t fall in love with the upside.   We are still in a long-term bear market until we see some major fundamental changes.


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