One down, one to go. Remember my theory of the Big Bad Events. People hold back buying ahead of Big Bad Events such as the European Central Bank announcement, to be sure there's no downside surprise. They don't fear missing an upside surprise, because the trigger-pull money remains bearish or on the sidelines.
They come in reluctantly after the news, when the news is in-line. Who knows how high this stock market would be if Draghi had cut rates in addition to the non-surprise of bond-buying?
Oh, and once again, you can measure the worth of Draghi by looking at Banco Santander (SAN), which has a huge number of Spanish bonds and Spanish real estate on its books and is the largest bank as a proportion of GDP of a country that I follow.
Yes, it has only 20% of its business in Spain, but Santander and Banco Bilbao Vizcaya Argentaria (BBVA) will be the two surviving banks at this pace, and Santander can be Lehman Brothers if things go wrong. The fact that it is monetizing the other assets is a terrific sign, though, with the Mexican deal being the latest positive.
We could have even more aggressive buying than I thought because of the triple threat of a good monthly jobs report tomorrow, with the Challenger survey, the ADP survey and the weekly jobless claims all pointing to a decent number tomorrow.
Shorts are afraid of that number, because it triggers tons of buying and selling on the news. The bias against the ECB by the trigger-pullers does not extend to the U.S.
So we get the first event, and it is fine. The second event is looking fine, from these three inputs, so more buyers than usual are taking the plunge.