The ripple effect of closing and basing the previous week from 800 lows manifested into a rally today that finally shredded the 850SPX mark, finishing at 875 level.  Last time the market had a win streak of 4 up days was when Santa was motoring out of town for a New Year’s party that led to 944SPX.   That pretty well puts in perspective what a dreaded January it’s been for the markets as this current move needs another 50% (70 pts.) or so just to reach this year’s high!.  On the other hand, we’ve had a pretty good month here at DJIM while the market had negative returns,  we’ve been pretty selective and most recent ideas tacked on nice gains today,  just overnight,  FSLR added on 6-7 pts to highs, SPWR was up 7% at highs, NTRS play has gone from $54-55 to 61,  joining JPM GS as the financial plays here and CHK could have been caught for 5-6% in a few intraday hours.    When there’s a broad rally,  everything practically moves.   The reason we’re pointing these plays out is despite the markets celebratory mood,  it was time to cash in some chips.    Considering the market has been whipsawing most indices ETF traders to bits lately,  it’s prudent to take some profits at this point and wait for the next buzz word to materialize…a headline buzz while the markets pullbacks a tad in overextended names and consolidates some.   (A negative headline that could slow down things is the Republicans stance today on the stimulus).    At least, that is the hope for the rest of week..consolidation!    Afterwards,  we can pick up where we left off in picking up back the names that have worked this month, albeit the Financial Generals or EPS sector/ plays.    Nevertheless,  it was essential to break 850 to have any short term possibilities of going higher and we should just be happy about that.    The mood has changed, even though today’s rally was due to talk (CNBC) of “Bad Bank” in the near future,  it has put to rest “Nationalization” talk it seems.    The original problem in Europe after their latest plan was that it didn’t do enough in taking away the toxic assets and bank stocks reacted poorly initially.    We noted this back than in a Journal.   The tone is different here and the markets are believing these toxics will go away and are showing they want this clear slate of sorts.

The steel sector joined in the fun despite EPS, $ targets being lowered, but as we said what will you do for me next week.   The FED light today,  for whatever reason strengthened the $USD immediately and commodities may feel a pinch tomorrow.  Steels names due to 2 day gains may feel more pressure than others.   Already, Shippers will definitely face stress with DRYS covenants issues released AMC.   

So heading into tomorrows trade besides all the above,   we’ll keep monitoring (pray;) for a good EPS story,  we are also looking at energy names (nat gas inventory at 1030, est -180), the OIH/$OSX are leading on the heels of not the price of crude , but refining (refiners) margins.   Even if the financials slow,  maybe the energy names can pick up the slack and hold the 50 day moving avg of ~867SPX.