For the first time in history, the DOW has had 4 consecutive closes greater than 400 points. Add another notch to the week of "this has never happened before".
Yesterday's rally was interesting because for most of the day you could see through the VIX that they were not going to get caught a second time this week. The buying was there but the VIX was not reflecting the same optimism as Tuesday and that ultimately led to steadier more careful buying until late in the day when they accelerated the buying and then backed away the last 10 minutes.
The futures are gyrating overnight (this is being written at 5 am ET) and only an hour ago they quickly dropped 10 points on France's growth report (it's amazing that an economic report from France can now knock 1% off the U.S. markets in a matter of minutes). Europe continues to remain the tail that's wagging the dog. Negative news from there will continue to put pressure on U.S. prices.
If Europe is quiet the rest of the day, and if the U.S. economic reports are in line or better this morning, the market should continue its rally (these are all big "ifs" right now). Amazingly though, the NASDAQ has a shot of finishing the week higher. This is not something anyone could have envisioned Monday night.
The above is from Larry Connors' Daily Battle Plan .
To learn more about the Daily Battle Plan - including access to Larry's daily ETF trading signals, click here for more information.
And for more on ETF trading, be sure to visit us here to check out the book that Stocks, Futures and Options (SFO) Magazine called one of the best trading books of 2009: High Probability ETF Trading: 7 Professional Strategies to Improve Your ETF Trading.
Larry Connors is founder and CEO of TradingMarkets.com.