It must be options expiration week. We’ve had another announcement of massive government intervention.

Bloomberg reports Fed Releases Flood of Dollars, Market Rates Fall :

The ECB, the Bank of England and the Swiss central bank will auction unlimited dollar funds with maturities of seven days, 28 days and 84 days at a fixed interest rate, the Washington-based Fed said today. All of the previous dollar swap arrangements between the Fed and other central banks were capped.

That’s right, “unlimited.” But that’s not all! Today we also have an announcement that we are planning to do something. The complete non-news headline Paulson, Federal Reserve to Meet With Banking Executives Today. The result of this meeting will be the announcement of a “comprehensive financial stabilization plan.” I like the absurdity of a headline about meeting to make headline news, just to avoid looking like we are acting too slowly.

The Dow is up over 500 points right now. I’m going to gamble and buy a put soon, expecting a slide into the close. Because of options expiration and the manipulations, I expect an up market into the end of the week. It’s reasonable to expect a gradual rise every day. I’d like to point out that a close of +500 would be historically unlikely. The biggest single day gain occurred after the crash in 1987, with a 10% gain, so it’s also not unheard of.