After a further sell off on US markets overnight, which saw the Dow Jones 5.5% lower and the Nasdaq -6.9% , our market opened significantly down. It travelled lower in morning trade to be down just over 220 points at one stage – a 5.5% decline. Rumours of a third round of quantitative easing by the US Federal Reserve seemed to spark a solid rally from the middle of the day, which barely abated for the market to close near its highs for the session and post a gain for the XJO of 48.7 points. A gain of 1.2% marked a significant turnaround and such a wide range for the day indicates significant volatility. My indicator puts volatility at the highest levels since June 2010, but still a fair way off levels seen during 2008 and the GFC. The turnaround was lead by financial  stocks with the related sectors up more than 2% and volume for the day was solid. Watch for an updated analysis on the XJO tonight for our take on where to from here. US futures have also rebounded in night trade from a deficit of more than 2% to being up more than 3% at the time of writing.

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