Watch For the No-News Rally

Virtually every rally we have seen during the past two months has been triggered by news of some bailout plan, rate cut, or some other central bank/treasury action. And after some temporary euphoria the market turned right around and fell to new bear market lows.

How will be know that a longer lasting low is in place?  I am looking for a rally that develops without any news for an excuse. Such a no-news rally would be the first sign that the panic selling has dried up.

This morning the market hit 963, rallied to 1045 on the news of central bank rate cuts, then fell back to 968, and is now on its way up again. This second leg up is of the no-news variety, but not in a very convincing way. So I think that the e-minis will probably have to drop into the 930-50 zone before a real no-news rally can start. When it does I think we shall see the average rally 15-20 % in a few days.