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Bright Lights, Big Citi

Take drastically oversold conditions, throw in a few bullish headlines, and you have a broad market rally.

We have the first 90 percent upside day (90 percent of volume on the upside, 90 percent of stocks advancing) in a long time.

The bullish headlines came in three waves. In the morning:

1) Citi's Pandit said they were profitable in the first two months of 2009

2) FDIC's Sheila Bair gave an interview to the Washington Post talking about more detail on the public/private partnership, clearly implying that the government would be doing very little buying of distressed assets, and would instead provide low-cost loans to private participants.

Midday, Rep. Frank said his hearings would looking into making some modifications to mark-to-market, and implied that the SEC was considering reinstating the uptick rule.

Late in the day, Treasury Secretary Geithner said he saw a recovery starting in the second half.

Regional banks up 16 percent, Home builders up 12 percent, REITs up 14 percent, Oil service up 6 percent, Semis up 8 percent.

Volume was heavy.

A sustained rally now depends on banks bottoming on Obama plan, and a commodities bottom.

The uptick rule: traders are kidding themselves. Traders swooned when Rep. Frank said he was hopeful the SEC would reinstate the uptick rule.

There is much less here than meets the eye. Here's why:

1) Based on my discussion with market participants, it appears that trading firms do not have the technology to bring back the uptick rule in place. When I asked how long it might take to get the technology in place, the answer was 6 to 12 months or more!

2) When I ask knowledgeable participants what evidence exists that bringing back the uptick rule will result in a net positive for the markets, I get nothing. To my knowledge, there is not a single study anywhere that has looked at this. It is simple trader folklore that it will make a difference.

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Questions? Comments? tradertalk@cnbc.com

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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