Closer Look at the Roller Coaster
(Update your trivia knowledge)

We all know that last week marked the worst week for stocks - but let’s take a look at how individual daily performances stack up to the best and worst of the past 80 years.

Yesterday, October 13th, marked the day with the most points gained, nearly doubling the previous high set on March 16, 2000. However, in terms of percentage, yesterday ranked as the sixth-best day.

Speaking of point moves, 5 of the top point moves in the history of the market happened in 2008. By the same token, 5 of the biggest point-losing sessions of all time have occurred this year as well.

 
Click to enlarge

The market made that oversold move -- that same-tide-lifts-all-ships move -- which I felt would happen soon.

Now it gets tougher. As the tables above illustrate (though few need reminding), the market is extremely volatile, and it's going to stay that way. The key now is not to give up yesterday’s gains - at least not in one session.

There are still market-moving news items in the pipeline, including more specifics on the rescue plan (e.g. the shift in focus from buying toxic assets to investing in banks). It looks like there will be a join venture between the Treasury Department, the Federal Reserve and the FDIC. The Treasury will take $250 billion from the rescue plan to take stakes in thousands of banks. The FDIC will lift the $250,000 insurance account to (maybe) an unlimited level.

All of this action let us forget for a day that a recession is coming. There were earnings warnings and brokerage downgrades that normally could have pressured major indices. Yesterday, Bill Gates said unemployment could reach 9% over the next couple of years. That's a shocking number, and would be the highest since October 1983. I don’t think it's going to go that high - though the macro models haven't been updated yet, and we may have to wait for much more data before feeling confident in any estimate.