Today saw an initial slaughter of quality stocks across the board following the panic selling of yesterday as panic ensued and investors (read hedge funds and large investors) threw in the towel.

At precisely that point...300 DOW points below yesterday's close we had a reversal of fortune and turned around to see the DOW climb up 600 points from the abyss to close 298 points positive.

Everything was in place.
1. A retest of yesterday's panic low-Successful
2. Extreme oversold conditions on quality stocks as evidenced by the the VIX spiking and put/call ratios going through the roof.
3. Extremely undervalued stocks (cheap bargains) (below 11 times forward earnings for the SP500 average)
4. A Fed panic rate cut making ideal conditions for banks to make money despite the mortgage mess. Rate cuts will eventually boost margins for banks and other lenders, which have been working to lower costs and boost cash levels through layoffs and stock sales.
5. Badly hammered down stocks are now market darlings...GS, BAC, WFC, HOV, LEN (up 13% just today).

Today's close was not just above yesterday's close,but the best close of the last three days of trading.

This does NOT mean that the volatility is over though. Volatility is going to be with us for a while, so this is a trader's market. If you are conservative...remain on the sidelines. If a trader remain agile, and begin to add value to your portfolio...It is going to be a long time before you see bargains like this again. APPL was a gift for those not holding since the Measured Move exit at $188 (down as low as $126 today). INTC was up 7.25% today after beating estimates and getting a 10% haircut last week. It was up even as the rest of the market was bottoming. These are stocks that have been pummeled without reason, just out of fear and panic, and there are a lot of them out there.