Monday's Big Bounce Sets Up For Extended Short-Term Rally, Continued Volatility

After last week's bloodletting, it was no surprise that bargain hunters emerged to open the week's trading, sending the markets through the roof right at the open and holding gains throughout the session.

With a four percent loss booked for the prior week, Monday's 1.5-2.0% gains amount to little more than a technical snap-back rally off some very fresh and very dangerous new lows. Early indications from brisk Black Friday weekend sales were the most likely catalyst for Cyber Monday buying, a reflection of what may be considered a robust economy backed by consumers with full wallets and plenty of room to spare on credit cards.

While the Fed has been tightening over the past two years, banks, credit card operations, and shadow banking entities have been cranking up the credit spigots, loosening lending standards and making more money available via an array of personal loans, small business offerings, refinancing, consolidations and other assorted credit vehicles. There certainly is no shortage of easy money in the consumer and small business space, nor in the higher levels of corporate finance.

Add to the consumer and business conditions wide-open spending by governments at all levels and the US economy appears robust, dynamic and unflinching. Never mind that the Fed is threatening to take away the punch bowl. There are more than enough willing participants and suppliers of easy money, many of them spring the mix with added enticements.

There are crosswinds in the capital markets which lead to wild swings in every manner of asset. The flavor of the day may change, but the underlying theme of easy money has not yet left the room. America is in a period that rivals the roaring twenties, the nifty sixties and even the greed-is-good nineties.

The party goes on until the elixir of fast, easy money is taken away, and that's not happening any time soon. Expect even more volatility through the holidays and into the new year.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72
11/15/18	25,289.27	+208.77	+173.05
11/16/18	25,413.22	+123.95	+297.00
11/19/18	25,017.44	-395.78	-98.78
11/20/18	24,465.64	-551.80	-650.58
11/21/18	24,464.69	-0.95	-651.53
11/23/18	24,285.95	-178.74	-830.27
11/26/18	24,640.24	+354.29	-475.98

At the Close, Monday, December 26, 2018:
Dow Jones Industrial Average: 24,640.24, +354.29 (+1.46%)
NASDAQ: 7,081.85, +142.87 (+2.06%)
S&P 500: 2,673.45, +40.89 (+1.55%)
NYSE Composite: 12,181.60, +145.36 (+1.21%)