Equitymarkets up for the 4th day, and counting.

Bearmarket rally, still rolling. Will it continue? Well, everybody trying their hardest, for sure.
US quantitative easing in full progress post Tuesdays Usd 800Bn Fed funded programme to buy GSE and other mortgage debt. Bond and mortgage yields falling on the back of it.

* US home (average) loan rates declined from 6% on Monday to 5.5% on Wednesday. Stressed mortgage rates for 30 year fixed loans fell from 6.33% Monday to 5.97% Wednesday.
Corporate bond spreads declining along with mortgage spreads, all supporting the equity market, which has responded very well.
* Citigroup jumping ca 85% since the closing last friday, with the rest of the banking sector tagging along, although with various speed. All courtesy of the US Treasury.
* One of the delevaring indicators, the USD, has weakened against the Euro from 1.24 last week to over 1.30 yesterday. Sub 1.29 today. Emerging market buying of equities and currencies, with the EU bringing cohesion funding spending forward.

Question is, will we now see the pools of unleveraged liquidity, generated from the forced asset liquiditation over the last months come back into the market? Will attractive valuations be enough? If so, there will be a substantial bearmarket rally. Institutional realmoney will be the main indicator. The "Once (or twice/third) burned twice shy" rule is still applicable though. Capital preservation focus should still rule for now.
Watch this space.

Me myself am dipping my toes using mainly options. After being long US bank puts, I am now long ditto calls as well, having reduced the puts. Want to get hold of Brent Oil and Gold Calls, but easier said than done at the moment.
Monitoring the Emergings closely.
I am still long Swedish bank puts due to the Baltics, long Fx Sek puts vs Euro for ditto reasons. (There are other reasons as well, more on this later).
Still long the Usd in cash.

Happy thanksgiving! Count your blessings and best of luck.