The S&P 500 has now rallied 60 points, or 5.2% from the point Monday early afternoon when rumors began that the Chinese would be buying Italian bonds. It remains a 'student body left' or 'student body right' environment (or in CNBC terms 'risk on' or 'risk off'). Buy everything - or sell everything.
Today is a great day where you see the market drives the news, not vice versa. Unemployment claims came in above expectations and consumer price inflation came in hot (obviously the reality of the inflation figures are up for debate but that's besides the point). In theory higher inflation should quell the Fed from further action because the reason for QE2 was to stop any chance of deflation; now we just printed a 2% CPI figure. I definitely don't think it will matter for Operation Twist, and Ben can claim he is creating jobs (or allow for higher inflation rate target) when he brings on QE3 later in the year or in early 2012.
Whatever the case we're now 20 points away from the level that last caused the market to pull back. Until the S&P 500 gets back over that 200 day moving average around 1250, this remains a traders market with short time frames - buy the dips, sell the rips, etc etc.
I will repeat what I have been saying the past few weeks - this hectic moves, up or down, are not healthy. They just feel better when they are up, instead of down. Risk on!