Any remaining bears in the market learned the hard way that all it takes is one piece of news to create a monster, face-ripping rally.
The Dow Jones Industrial Average nearly experienced its biggest ever one day percentage gain as European leaders finally came to their senses and agreed upon a proper debt plan for Greece and other trouble nations. The Dow climbed 341 points or 2.8 percent 12,210 – shattering the pivotal 12,000 mark and then some. At one point during the day, the Dow was up over 400 points.
The S&P 500 also enjoyed monster gains, shooting above the key 1288 point and skyrocketing further to close at 1290, but ended up closing up 3.4 percent at 1284.
European leaders convinced Greek bondholders to accept a 50 percent writedown on their debt holdings while the European Financial Stability Fund’s (EFSF) capacity rose to 1 trillion euros ($1.4 trillion). The cause for celebration was felt through equity markets worldwide.
“The last time we had a 50 point rip on the open to upside in SPX was on August 9,” Wesley Harr, trader at optionMONSTER.com, told Markets Media.
“This market is a steamroller. Earlier, I mentioned the potential for a low risk short at the 1286 area. Well the walls must have ears because they ran all the shorts out of the game at the end of a pike as soon as they put them on. You can’t be short this is a long market period. Upside targets 1295, which we went after today.”
Pessimists who are still of the opinion that a rally like today can’t sustain itself need to think again, according to Harr. The market moves quick but future profits are all but certain.
“Easy money has been made but it has been made very fast. Stay extra cautious of being greedy and take some profits,” said Harr.
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