Day 1 of attempted rally?
Technically this is day 1 of the attempted rally, however, the volume numbers were very weak even when compared to Thursday's numbers since we know Friday's numbers were affected by the botched Facebook IPO. Speaking of Facebook, if that IPO had gone as planned we would have seen other companies in a similar space with nowhere near the fundamentals Facebook has come to market. Facebook was overpriced because the underwriters could gather more fees. Remember the DOT COM bubble of the late 90's when we had companies with no revenues coming to market with huge valuations?
Speaking of valuations, Linked In comes to mind. It currently trades at 250x earnings. That's a pretty hefty valuation. I'm not sure where Facebook stands at this time, but it is still overpriced and as soon as the Memorial Day Holiday passes, the OCC will start trading options on the company and I'm sure there will be investor's lined up to pick up 'puts' on the company which will probably drive the put premiums sky high.
Just remember today's rally came on the backdrop of a very extreme oversold market. It was bound to bounce. However, if history repeats itself, we have be looking and 5% ups and 5% downs over the next several weeks now. We shall see.