Why did market go up today? Try to move beyond the catch-all phrase "short covering." It's easy to throw up your hands and say, "What changed?" And the answer, of course, is "nothing."
But that's not the way the stock market works, necessarily. It moves on perceptions as well.
The stock market moved because there are some data points surfacing that things might be changing.
1) announcement of a Sarkozy-Merkel meeting next week reversed the downward trend prior to the open. The perception: they're going to address the possibility of an EFSF bailout of every country.
"If Merkel comes out to support the EFSF, or a eurobond, then that's all you need," one trader told me. "She likely has enough to jam it thru Parliament."
2) Rumors of European short selling bansurfaced, particularly in Italy. Hopefully this will turn out not to be true.
3) Insider buying, corporate buybacks jump. This was widely discussed on trading desks today. How do you know when you're at a bottom? It's hard to tell, but when insiders and corporations show signs of buying, that's at least a good starting point.
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