Volatility here to stay

Talk about roller coaster ride. 

We know earning season brings with it volatility, but the day like today definitely is more than most of us expected.   For a day trader, it might be a good thing since day trader can trade both ends of the market and he has the luxury of time to watch the tape tick by tick, however, it definitely is not good for the rest of us, many good trades were cut short.

It is a tug of war between the bulls and bears the whole day. It is the battle of good earnings against bad housing sectors and rising oil price.  A battle between the hope of another rate cut against the fear of bad economic data.  At the end of the day,  it is the hope wins over fear, bulls defeats bears.  It says a lot about the resilence of this bull market.  It also tells a lot of the collective psycho of the investors/traders as a whole.

It seems to me most people have already concluded that the market is going to go higher regardless.  Even though, there are soft spots in this market, but the majority are treating them as  "glass half full".  So, the good news is good news, and the bad news is becoming good news too.  The beige book painted a slower economy due to the spill over of the housing implosion, it is actually very bad since FED thought the house only have a limited impact on the whole economy. But no matter,  the wall street cheered the news as it cement the belief that FED has to cut another quarter point of the discount rate, and stock begin to rally.  Maybe, in the short term, there is nothing to stop this bull.

But, I am watching with caution to the "china stock", as all of them racing to the new highs today.  There is no deny that there are fundamentals to support a stronger chinese stock market, but, there are signs that speculation is reaching to the degree of "dot com" fever.  What if china bubble burst?   will it have any impact on the global market?

Anyways,  for the next few days,  I am cautiously optimitic.  If tech earning continues to be strong, we should be ok and be able to overcome the obstacle along the way.