Good week for the bulls as they continue to put some distance from the washout of Jan 22nd. This market will continue to fight bad news and as mentioned before, this election year will create many obstacles for the bear. Clearly the trading world related to sub-prime, the rating agencies involved, and the oversight by various regulatory elements have left the economy with bubble all over it's shoes. However, the dynamics of trading stocks and their derivatives many times have periods of total disconnect from the directional bias of the overall economy. Declines culminate with liquidation, intervention, and insider positioning which allow the anchoring investment/brokerage/banks to right themselves. These primarily conservative, free enterprise champions are always the first to accept Federal Reserve and or government intervention while having spent careers whining about government spending. Like so many wall street conservatives, it is always about principal, until it is about money.
Bears will have plenty of opportunities to launch volatile sell-offs, but a base in building.
