This is The Wall Street Digest Hotline Update for Tuesday, September 30, 2008, at 6:00 p.m. EST.
Efforts to put the TARA bill back on the table pushed stock prices higher today. At the closing bell, the Dow soared 485 points, closing at 10,850, while the Nasdaq jumped 98 points, closing at 2,082. The S&P 500 closed 58 points higher at 1,164. Oil closed $4.27 higher at $100.64 per barrel, and gold closed $13.60 lower at $880.80 an ounce.
The powerful six-year down cycle bottomed today. But let's wait and see what the SEC does with the short-selling ban.
Trading on Monday was an exceptional 75-to-1, downside volume to upside volume indicating a sold-out market.
The Vix Volatility Index hit a multi-year high at 46.72, another indicator of a likely major market bottom. If Congress passes a convincing Main Street bail-out bill fairly soon, we could see a multi-month rally perhaps into December.
However, the economy is sliding into a ditch. 2009 will be a very difficult year. An economic disaster is waiting for the next President.
The real value of the $700 billion TARA bail-out is to temporarily stop a financial collapse, which will give you time to prepare for the great Bear Market economic crash between 2010 and 2015.
Now is a good time to read "The Great Bust Ahead" by Daniel Arnold.
You should stay 100 PERCENT CASH.
Stay close to our Hotline Updates.
The next Hotline Update will be on Friday, October 3, 2008, at 6:00 p.m. EST.