Markets:

Today's major rally into the close seems significant to me. Not because of the rally itself but because of the panic and fear that was gripping everyone early in the morning. We had a classic panic to the bottom. This fishing expedition may be a case of "too much too soon" on the downside, so be really careful. If you're a bargain hunter you might take a few shots here. On my end, some of my big hitters jumped in and bought S&P calls and wrote S&P puts. Two of them went outright long futures (bailed at the close so they ain't that sure) but even more significant is that we are clean out of puts. We need to see more than a strong close to feel OK. The chart below is a WEEKLY Dow chart, just to put things in perspective. When you look at the weekly you can see that this was no big deal---so far. The close is not totally positive but it sure ain't completely negative. What is even better is that support at 13250 heldThe big warning sign here is the possibility of ---DEFLATION ---something that could really kill us (people just walking away from their homes bought in the last three years). Now, for the first time that I know of, a few of the talking heads are worried about a Democratic tax hike. THAT will kill the bull for sure. If people start cashing out of 401Ks etc. it won't be funny. Still dangerous as hell but I'm not totally pessimistic.