Big rally, so familiar

A big rally today. The news said it's one of the biggest one day point gains of DJIA since July 2002. Looks like people are happy about it. I think the rally is more on the news regarding the group of several central banks will lend banks about $200 billion to provide them some credit relief. US government (the Fed actually) initiate a new plan which will lend treasuries securities to the investment banks, take mortgage-backed securities as collateral, and let the banks to make money on the borrowed capital, and only to repay them in 28 days, instead of next day.

Will this method better than reducing the fed fund rate and discount rate I'm not sure, as the economic consequences can be very complicated and unpredictable. I'll first go back to my charts and check the reaction today.

Yes all indices went up by a lot today. The rally is pretty broad base too. However, I checked many US sectors ETFs and country ETFs, as well as the major 4 (DIA, QQQQ, SPY and IWM), none of them has blast through any meaningful resistance. I then checked some large cap names like all the banks, brokerage firms, some tech stocks and some other big names. Only a few of them has tested the 20-day EMA or the lowest EMA out of the 4 I usually use. As well, on some of the ETFs and large names, I don't see significant abnormal volume.

Given that kind of graphical result, I guess only if there is follow-through rallies and the rallies are strong enough to push those ETFs and stocks to test more major resistance (that is, the highest EMA and as well, at least bring the 20-day EMA to test the next closest EMA), otherwise, I cannot conclude and convince myself that market changes direction.

Funny gold and oil didn't drop due to this "good news". Oil went up by about 10% as I expected earlier since it broke $100. I would expect gold is the same kind of situation. If gold breaks $1,000, it will go up by about 10% very quickly. It may then go back down to below $1,000 before it will go up again. I think oil is doing this now. So in short term I think $110 is the top, as most of the short position around or below $100 should have been covered.

Still have my little position in DGP, the ultra long gold. I guess sooner I'll buy a bit more if gold dips to closer to $950, it that happens.