How’s that for ‘Upside Risk’ shorts?.   We told you the weekend leaks were one big risk!.   All we could say is Mr. (yes, it’s Mr. now), not whipping boy, Geithner, why did you ever bother with the sketchy February 10th - 4 point plan,  if  you had no specifics to revive capital????.   It’s all in the details..details !.    That day the SPX closed at 827,  today we surged through the 50ma and closed well above this 800 mark.   This close is a big positive and the Bulls finally should have the upper hand going forward.  On a technical view,  the next big TA levels not until the upper 800’s.   

The premise since late last week was that shorts were leaving the market to figure itself out by not taking new positions.. "shorts are not lining up new positions due to upside risk to news".   Those are the smart shorts, the ones still helping the market go higher by short covering are not so smart looking today.   Last few days as the market slid slowly back under 770,  we believed this was just a healthy tired action as recent market gains were being digested and not relinquished …“The market will do what it needs to do!.    At this point, there are still upside risks as we come into month/Q end for the shorts and that may keep the market from a major pullback and instead break the 800 hurdle later next week….”.  Without going into the small print of the programs introduced (we‘ll send you a PDF file if requested),  we also had positives in the Housing data and more M&A activity as the biggest deal came along since 2006 in the oil sector.   Can you believe that ?.   The good ole days are back of M&A Mondays;).    Okay,  maybe that’s a stretch,  but if you add up a few things this rally is different from all the others we’ve had since all the bailout rallies that failed.    Why?.    A few differences is now we have M&A activity on a weekly basis,  Oil running to 4 mth highs and sentiment is much better.  Confidence is emerging,  but the confidence in your politicians is going to be a possible cloud if they keep sticking their noses into the wallets of Wall Street!. ( a 2:50pm headline helped the rally…Senate could delay debate on its bonus legislation until next month to give more time for consideration).   
In the morning to make the gap work and extend,  we got what we posted premarket as a 'key ' to the plan …White House National Economic Council Director Lawrence Summers said that investors in the Public-Private Investment Program won't be subject to the compensation limits  applied to banks rescued by the government.   Once this headline hit CNBC,  the market sighed in relief and started its move to tackle with 800.

What’s the next big catalyst?.  You got a sniff of it late today and that is if bankers- brokers raise capital through private equity deals to exit the TARP!   This is amost a clincher and what will drive this market closer to SPX 1000.    Did we say that..1000?..lol.   We'd definitely buy the market the day we hear news like this.   GS  helped this rally late because the WSJ reported that Goldman was considering selling part of its stake in China's ICBC and would use the proceeds to pay back the TARP.

Into the trading day, we noted Financials will again be in focus if the Geithner plan is liked by the market.  Did it ever (+18% financials)!  The move recently has been great in this group and it's arms,  but there is a lot of upside left, we're only back to February lows.    Long term money flow,  if believing into this market story have a lot of room to maneuver into and profit.   The only thing is now to let some settling take place.   So, while this likely occurs tomorrow,  we'll continue to focus on the commodity, energy trade from last week.   The stalwart (tech) of 2009 is back after a short hiatus and is tradeable once again.

We have more legs to this rally,  we have the upside risk due to events unfolding in respect to, "...with Q end coming it is the perfect time seemingly to get the hedgies to prop up their books".   This is of course now more than ever relates to 'Whales' doing the same (MF`s Institutions).   For potential vibrations in the market this week,  watch out for DC and budget draft resolutions.  As we know, lawmakers can dampen things pretty quickly, but view any negative items as an opportunity to buy on the pullback.