CITIGROUP BAILOUT GIVES FINANCIALS AND STOCKS AN EARLY LIFT -- GLOBAL STOCKS RALLY -- COMMODITIES BOUNCE AS OVERBOUGHT DOLLAR PULLS BACK -- GOLD STOCKS ARE BREAKING OUT -- BONDS AND VIX ARE DROPPING AS STOCKS RISE

FINANCIALS LEAD RALLY ... A government rescue plan for Citigroup is pushing that stock 60% higher this morning and giving a big boost to the financial sector which is gaining more than 10% on the day. Financial buying has spilled over to the entire stock market which is trying to build on Friday's gains. The fact that stocks are trying to bounce off major chart support near their 2002 lows is also encouraging. Global stocks are jumping impressively as well. The daily RSI lines in Charts 1 through 4 show the market to be in an oversold condition with some positive short-term divergences (see arrows). A bounce in commodity markets coincides with a pullback in the U.S. Dollar. Friday's upside breakout in gold hinted that the overbought dollar was due for a setback (Chart 5). Gold stocks are breaking out today (Chart 6). With stocks on the rise, overbought bonds are experiencing some profit-taking (Chart 7). The CBOE Volatility Index is dropping 12% as stocks rally (Chart 8). It's a good start for the week for the market. And it's coming at a very crucial time with the market so close to its 2002 lows. Now it's a question of whether or not today's strong start has any staying power. We'll be tracking its progress today and throughout the balance of the Thanksgiving week.

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