In speaking with those negatively inclined toward stock prices these days, it is safe to say that the bears
really thought they had something going last week. All the talk of disappointing economic data led the glass-is-half-empty crowd to
really and truly believe that the recovery might be delayed or, worse yet, that the expansion phase could be even more dismal than has been projected. And with a couple moving averages as well as a widely followed support zone having been snapped, well, our furry friends were probably feeling
really good about themselves.
However, after the action from this week in general and yesterday in particular, it is becoming obvious that the bears are going to have to find a really good reason to knock the bulls off their track these days. Because without that reallygood reason, it appears the bulls are able to pick up where they left off after each and every scary down day or two.
After two days of strong buying it would have been completely normal to see the bears emerge from their dens and for the bulls to take a day off. One might have expected to see a downside test of a moving average or two, or maybe even a scary pullback that might force our heroes in horns to question their conviction. After all, some stats from the likes of Peter Eliades suggested that the odds of a quick downside move over the next few days were something on the order of four to one. And then there was some talk of stocks being overvalued as well as some discussion about the quality of the upcoming earnings season.
But instead of a nasty case of too-far-too-fast, the bulls were able to relocate their mojo, which in this case meant that the dip buyers continued to do their thing. Instead of stocks pulling back in front of the retailers' same store sales comparisons, both the S&P and the NASDAQ finished with green screens. Instead of some trepidation in front of the start of earnings season, the banking index blasted higher by more than 1.1%. And instead of a test of support, the bulls came away with more advancing issues than declining issues. All on what by all rights should have been a down day.
So, although we run the risk working in the Department of Redundancy Department this morning, we will suggest that unless the bears can find a really good reason to convince traders and investors alike that owning stocks is about to become a very scary endeavor, then the bulls just might continue on their merry way to new-highs-land.
Turning to this morning, Alcoa (AA) got the earnings season started off on the right foot for a change as the serial disappointer came in with an earnings "beat" to the tune of $0.04 vs.
