Dead cats do bounce, and the markets proved it today, going from big-fat-red to big-triple-digit-green. V&M crossed around 2:00 CT to the positive side, and from there it was "To the Moon Alice!" for everything.

And no, I don't think the bounce is over.

Nor do I think it changes a thing in the intermediate term.

In fact, I've said for a while that we'd get this sort of bounce, and if you were one of the poor bastards trapped in long positions, you'd get a decent chance to get out.

Well, today you got the start of it.

If you're a Bear and overstayed your welcome without stops, well, go look up the definition of "squicked" on Google.

This sort of day is why I preach money management and stops! Always! My expectation that something like this was coming is also why I've been almost exclusively playing in the futures for the last couple of weeks, discharging option positions into the weakness, with a few choice morsels here and there for "special situations" (like the VIX yesterday.)

The rally is likely to go on for another week or so, probably into the FOMC - at which point the Goldilocks Crack ***** is likely to be disappointed with the size of her hit, and Hissy Fit #2 will almost immediately ensue. Of course it could go longer - but if I had to place a bet.......

The price action today smelled like a few big quant funds exploding. Big Cap Tech, which has been heavily owned, was sold and homebuilders and lenders where bought - which have been heavily shorted. There were also a bunch of "dark trade" markers left on the charts of a number of stocks that strongly suggest institutional buys and sells via "dark pool" trades - huge volume spikes with no meaningful share price movement in what it is otherwise a fairly idle volume tape.

Rumors today are flying all over that the monolines may be in talks with the State of New York and private banks to structure some sort of capital package. Who knows if this is true.

Note carefully, however - if the government actually buys any of these firms your common equity will be a zero! So buying their stock is an absolute high-wire act that I would not even consider. I did, however, take a SMALL CALL position on MTG today. Key word here - SMALL!

I will be playing this bounce long and when it looks ripe it will be time to really load the truck on the short side - the next move down is likely to make the previous one look like a Girl Scout picnic.

Here's your technical folks - enjoy!