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Just when we mentioned yesterday that the market had three reversals in a row, today the market gave us a fourth. The Dow closed the day up by almost 100 points after losing more than 1% just 40 minutes before the close. The trigger of the rally is a reporter on CNBC mentioning that a bailout on the troubled second largest bond insurer Ambac Financial will be announced as early as Monday or Tuesday. The news was regarded as a positive to the financial sector as one short-term uncertainty might be removed. However, it could also be some shorts rushed to cover their positions before the upcoming weekend. We will have to wait until next week to see if the latest rally is sustainable. US dollar again was weakened against most major currencies. The CRB commodity index closed at another record high led by higher energy prices across the board. As for next week, we are going to get more data on housing, manufacturing, inflation and revised GDP. Any surprise – either positive or negative can quickly change the direction of the market. Indeed, we are living in a time of uncertainty.
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