By Greg Peel

The Dow rose 423 points or 4% to 11,239 while the S&P gained 4.7% to 1172 and the Nasdaq jumped 5.3%.

Wow.

Someone might be able to correct me, but I don't believe there has been as volatile a day in the Australian market as there was yesterday ? down 5% and up 7% ? since I was a young buck yelling myself hoarse in the SPI pit in October 1987. I don't recall a day of such intra-day extremes in 2008.

Realistically there was not a lot of selling on the open yesterday, only selling orders, given the market pretty much opened down 4% before it found action. That sparked a panicked exit from some until the buyers, who have been waiting for it all to get just too silly ? and 5% down seemed silly enough ? responded. We started to rally until Beijing announced its inflation numbers (more on that in a moment), fell back again for a while, and then the buyers regrouped for an unprecedented assault.

I am reminded of the scene in the 1980s movie Trading Places when Eddie Murphy says to Dan Aykroyd "Now?" and gets a no, then "Now?" and gets a no, before finally getting a "Now!".

Media reports suggest the market turned on rumours the Fed was going to announce QE3 last night. I believe that's rubbish. The Fed was to hold a scheduled meeting and there's been talk of QE3 for a month or more, particularly in the last few trading days.