Let’s call this a hot money market. When bank and broker-dealer shares stopped rallying yesterday, the broad market rally stopped. Then oil prices started sinking again, and the equity market rally picked up steam. So, hour-to-hour profit-taking (XLF short-covering and XLE selling to raise cash for buying Industrials and Financials) seems to be the market driver rather than the long-term commitment of new funds.

At the bell yesterday, the DJIA (+207.38 +1.85% to 11446.66), the S&P 500 (+14.95 +1.20% to 1260.31) and the NASDAQ Composite (+27.45 +1.20% to 2312.30) rallied strongly again. The Toronto composite dropped -43.6 -0.32% to 13460.3, mostly on the weakness in oils.

The winning sectors were Financials (XLF +4.3%, which followed a day of +13.1%) and Industrials (XLI +2.8%). In the Financials, the Banks ($BKX +9.4%, following a day of +17.3%) and Broker-Dealers ($XBD +6.6%, following a day of +13.2%) were big winners again. Also, with another significant decline in oil prices, the Airlines ($XAL +8.6%, following a day of +18.1%) rallied hard again.

The losing sectors, reflecting the commodity price pull-back in oils, were, once again, Energy (XLE -1.6%) and Utilities (XLU -1.6%). This chart of XLE shows the impact of lower oil prices. This one shows the three-day collapse in the $WTIC (-5.14/bbl yesterday closing at 130.18, following -4.05/bbl and -6.61/bbl losses in the previous two days. This loss of $15.60/bbl in three days is unprecedented, which shows the degree of speculation in the market since these price moves are not on account of new economic data.

Note also that the price of the energy stocks started a significant pull-back near the beginning of the month whereas the oil commodity price collapsed only on Tuesday of this week.

NatGas ($XNG -3.9%) and Goldminers ($XAU -2.0%) were down the most of the industry groups.

The winning Cara 100 stocks were CCL +9.6% (following a day of +9.8%) and BC +8.1% based on the oil price decline, plus India bank ICICI (IBN +9.5%) from a major over-sold position, and NOK +8.7%. The losers were NUE -11.1%, RIO -5.5%, GGB -5.3%, all in the steel and metals group. Suncor (SU -4.3%) continued its decline.

Equity markets in the Asia-Pacific region were mixed with Shanghai (+3.49%) and India (+3.99% up) the most and Australia (-1.25%) and Japan (-0.65%) the weakest.

Traders continue to support the banks in keeping with the rally in the US.

At this point in the session (7:10am ET, 1210 GMT), the European bourses have been in rally mode.