The assertion by ECB President Mario Draghi that he will do whatever is needed to save the euro had shorts scrambling to cover their positions.
After his comment, he ended the assertion concerning supporting the euro and what will be done by saying, "... believe me, it will be enough."
Many pros said his comments put a floor on the market.
It seems this is what traders and investors were looking for: more than just Ben Bernanke and the Federal Reserve pointing to intervening in the market with more stimulus.
The market's response shows it was looking for more support than the Federal Reserve, and now they've got it. If China visibly stimulates, it'll send the market soaring, the U.S. dollar plunging, and gold, silver, and other commodities much higher.
Of course this floor is one that can only last so long if measures aren't taken, as the market will then know it was either a general bluff, or something that won't be done until the situation reaches certain levels.
But with Greece surely going to exit the euro and Spain being bailed out, stimulus will surely come sooner than later.
That's the real story emerging over the last couple of days: what looked like a questionable possibility of QE3 in America and stimulus in Europe, now has ramped up to a very short-term window. That's what's moving the markets, not just the usual token statements that central banks stand ready to simulate if need be.
It appears the political pressure and weakening global economy has put the central banks on notice, and they are surely going to do something very soon.
And now with the comments of Draghi, it seems that it's not only immanent, but the size of the stimulus, at least in the case of Europe, appears to be gargantuan.
At least that's the corner Draghi has painted himself into. And anything less than something stupendous would now have a detrimental effect on the markets.
Whether or not all of this is political theater or not remains to be seen. But for now, it appears the plummeting stock market has been halted as traders await where central banks will go next.
If Bernanke and the Federal Reserve stimulate in the next several days at the next meeting, and Europe quickly follows, it would cause some huge upward moves in the market, and even hammer the shorts more than they are getting hammered now.
For gold and silver, they are going to soar as the U.S. dollar falls in value against the euro and other currencies, as will other commodities which are traded in U.S. dollars.
Commodity Surge doesn't support stimulus in any way, but it's going to happen, and we do need to be careful of how long the false supports will remain in place.
Most of us know throwing money at the problem hasn't and won't work, but we do like the predictability of the market immediately afterwards when unwarranted optimism gets investors all worked up and investing irrationally.
That will happen tentatively in the very short term, and when stimulus is announced, stocks and commodities will soar.
Now there is even more pressure on Bernanke and the Federal Reserve to stimulate quickly. If they don't, the effects of the Draghi announcement will quickly dissipate and his words forgotten.
That would in turn reverse the pressure and put it back on the ECB. Now that would make things interesting wouldn't it.
Either way, someone is going to stimulate soon, and whether it's the ECB or Federal Reserve first, it won't take long afterwards for the other to follow.
This is going to be a very interesting ride going forward, with conflicting data and results causing a lot of uncertainty and caution in the markets, while at the same time pushing investors to enter in.