I probably went a little overboard last night, but I am cool with that. I was frustrated that I wasn't able to act and participate on a day like yesterday. However, maybe that wasn't such a bad thing.

It is expiration week, and we are in the heat of earnings season. I warned in my video this weekend that this week was going to be extraordinary volatile, and that is exactly what we've seen. I mentioned that I wanted to see a closing price on or near 1225 which we got on Monday (1214). The next big question is does this rally fade, or does it stick? There are a handful of things I noticed yesterday that looked like it might be a multi-day event.

An absurd amount of volume flooded the financials yesterday, who were in dire need of a bounce. In fact, a good friend of mine bought ZION on Monday, despite my begging of him not to. He mentioned that he was "investing" and gave his reasoning behind buying into a bank that will survive this mess, and that has limited exposure to the loans that are coming back default. I don't own any banks, and can't see that yesterdays price and volume action creates any sort of trend. However, I can see the reasoning, and will be watching dips in stocks that will survive like WFC and USB.

I have also been quietly watching the homies and the refiners as they approached support. Both groups fell into some buying, and also saw some decent volume. I am watching RYL and VLO (remember my VLO trade from May? I was a month early).

No doubt this rally has been over the fact that crude has been selling off. What is interesting is that crude actually generated a sell signal yesterday via point and figure chart. Not looking to sell crude, but I still think that one of the best trades is taking advantage of the tops in energy stocks. As long as crude settles down for a while, and we get a few upbeat earnings announcements (KO, JPM, UTX) then this rally sticks for a few days.

Here are a few more energy "tops"...wait for confirmation, of course.

A few more things I like behind this rally....a stable NASDAQ and Russell 2000...

Not to mention the put/call ratio and bullish percent index looking favorable...

I like the idea of trading a few bottoms, just as much as I like the idea of selling tops...

No doubt that we still haven't seen the bottom. This market is like it was in the 70's-80's. It is going to be a traders market, so don't establish a long dated outlook and take everything one day at a time. In the meantime, milk this rally for what it is worth. No doubt the market will.

I am going to watch prices move over the open and then place a few bets. I'll let you know what I find.