Well, you got to give Ben Bernanke credit. He delivered exactly what the market expected. And stocks neither ramped nor sold off.

Interestingly, no other country responded with any stimulus/currency debasing of its own. Instead, England kept its policy the same as inflation there continues to run around 3%.

The U.S. doesn’t have that problem. Yet...

Apparently, the going rate for a 404 point rally on the Dow Industrials is $1 trillion. Any takers? Going once… 

After stocks lost $1 trillion during that surreal 2 minute stretch last Wednesday, it’s nice to get that market-cap back. But there is still work to do. 

Yesterday’s rally took the S&P 500 within range to challenge resistance at 1,165. It will be important for the S&P 500 to move above this level today.

Just yesterday, we discussed how stock market plunges can be set off by what amounts to a “global margin call.” And that’s exactly what yesterday’s decline felt like, as the selling was relentless.  

 

There were no bounces, no dead-cat rallies as the selling built pressure built until it reached its crescendo.   

 

That crescendo, a 998-point spike lower on the Dow Industrials, was caused directly by some computer-based trading programs gone haywire. (There’s no other way to explain how Accenture (NYSE:ANC) could drop from $40 a share to a penny.)  

Stephen R. responded to yesterday's column:

"There is sometimes a difference between doing what is legal and what is ethical. Goldman Sachs seems to believe that you can do anything that is legal, even if unethical. Thus, they set up AIG to fail. They help Greece defraud the European Union. They sell products into the marketplace and then bet on them failing, when they knew they would fail in the real world.

At some point in time people recognize that they are dealing with unethical, immoral charlatans and they stop doing business with them. If you know your business associates are crooks, eventually you go somewhere else."

I couldn't agree more. And I also think it is clear why firms like Goldman continue to attract business. It's greed. I remember when the Bernie Madoff scandal broke. Some of his investors confessed that since his reported returns were so consistently above average, they figured he must be gaming the system. And that actually attracted them, because they wanted a piece of the action, too.

A similar dynamic is in play with Goldman Sachs. Of course, when you play with fire...

If you haven't read up on how Goldman helped Greece fudge its books to gain entry in the European Union, here's an op-ed piece from Bloomberg that describes it pretty well.

I have to admit, I disagree with the author's conclusion that Goldman "...is innocent in Greece's swap crimes."

This paragraph, in particular, is cause for concern:

"The trick Goldman Sachs employed to help Greece massage its debt figures hinged on using historical, rather than prevailing, currency rates in a series of swap transactions. While that undoubtedly comes under the heading of fast-and-loose, it's not illegal; swaps are over-the-counter contracts between consenting adults, so no matter how divorced the values are from reality, it really isn't anybody else's business."

As I write today's Daily Profit, the Dow Industrials is down 158 points. Part of the reason stocks are selling off is that investors are worried about the debt issues in Greece. I, for one, don't want to hear that swaps Goldman helped Greece employ isn't my business. When investment banks knowingly act in a way that destabilizes the global economy just to make a buck, it absolutely is my business.

As Stephen R. pointed out, sometimes there is a difference between legal and ethical.

Oh, and did you know the Fed is now investigating Goldman and other investment banks for using swaps to bet that Greece would default on its debt? It's like accepting payment to help a bank robber escape, and then calling the cops to report the robber's hideout and collect the reward.

There’s no doubt that there are investors who believe that current valuations for stocks and an improving economy offer money-making opportunity. It’s also true that there are plenty of investors who feel the exact opposite and are selling stock. And for the last three weeks, the sellers have been winning.

The fact that stocks couldn’t hold a 1% gain after a stellar 4Q GDP number on Friday is a little worrisome. That was a lay-up for the bulls, and still, stocks finished the day with losses.

Volume has been stronger on the down days lately, and the S&P 500 is now well below its 50-day moving average, a common measure of support. I expect we’ll see stocks bounce before Dow 10,000 is breached to the downside.

But at the same time, there’s nothing magical about Dow 10K. Just because it holds on the first test or two doesn’t make it an important line in the sand. The Dow is just 30 stocks. Far more important is the S&P 500. And interestingly, there is an important support point at 1064 on the S&P 500. And 1071 actually lines up with Dow 10,000 nicely.