Is that it?  Do we just go straight up from here?

We are seeing a lot of psychology at work here.  There were many people (including myself) who positioned themselves defensively concerned with oil and gas prices, the Katrina aftermath, and potential recessionary pressures these could cause, that it had us leaning the wrong way.  Instead traders seemed to speculate that this crisis could have the Fed easing up on the interest rate hikes and add some liquidity to the system.  That action would stimulate the market but right now, as I said, it is speculation - Buy the rumor, sell the news.

It was also likely a short squeeze.  A short squeeze puts the pain onto any one who is short the market (betting their money that the market will go down) when it start to rise quickly.  It fuels the short trader to "buy to cover" their short position which adds more fuel to the rally.  That in turn ignites the bulls to buy out of fear of missing out on the rally.  What you get is a strong rally as we saw yesterday.  If there was any negative yesterday it was that the volume was a lot lighter than during the rallies last Wednesday and Thursday.

The very short term is now very overbought and we could see a little pullback or at least a temporary consolidation.  The market looks strong but chasing big gains at this point may not be the optimal move.  I believe patience may be rewarded.  It is possible the market could test the recent lows before moving up.  You will have to decide for yourself if it is worth taking a chance on missing more upside by waiting on a pullback.  I am proceeding cautiously.  I don't believe it will be as easy for the bulls as yesterday made it seem. 

Aside from the big day in stocks, the G fund gave us the penny gain yesterday (hardly satisfying), the F fund gave back some of last week's gains, the dollar rallied and oil fell to about $66 a barrel.

That's all for today.  Currently 100% G fund.  Thanks for reading.