While a strong end to the week couldn't get stocks back to the levels it started the week at, the new month is off to a great start. Yesterdays nasty sell-off was swiftly reversed. We've seen this story many times over the last six plus years with each ending to the story leaving the bears in tears and the bulls rejoicing record highs.
If you didn't read last nights recap, you wouldn't have seen this:
"S&P 500 bounced off medium term trendline support. We may have seen the low today of this pull back from record highs."
Yesterday the bears were out celebrating the end to an incredible 6 year bull market. Shorting every rip. Selling any and every rally..... and today? Gone. No where to be seen. A face rip reversal can be quite effective, and that is exactly what we got from yesterdays lows to today's highs. A 'shut the bear up reversal'.
One mans 'short of the century' is another man's consolidation. 2015 remains a tough slog with big gains getting reversed and vice versa. However stocks are higher and the trend remains up.
Look a the move in $LNKD options with the 18% drop in the stock options were rallying some 1,800% this is the end of day chain. Prices were higher at and after the open:
One of the traders in the chat room with $LNKD puts heading into today from $.91 to $21.50.
We hit quite a few buy-able bottoms.
$AMZN sharply reversed course mid-day and posted a positive close. It's been a nasty hangover after rocketing higher last Friday. The earnings gap remains, but the stock ended the week on a positive note.
$TLT came right near support before bouncing today. I think we could see a short term buyable pop next week as investors come to the realization for the 125th time since March 2009 that the FED isn't going to raise rates this century.
How can you not feel confident being in a stock that has an investor committed to buying $140 billion over the next year or two? $140 billion, my goodness. The number is mind boggling. They say the cost is $30 billion a year to solve world hunger. $AAPL spends that in less than 6 months buying back their own stock. At least the directors, officers, and shareholders are getting fed.
The stock sold off post earnings... why? Just because it could. Or perhaps because I owned some now worthless stock options. Whatever the reason, the report itself was good and I think the stock will hit new record highs in the month of May
US Dollar Index
At the end of 2014 I said to watch the Dollar Index for a break into triple digits. When it hit that level I said watch for a pull back to the 95 level. Now with that out of the way I am looking for a bounce back to 98, a formation of a long term wedge and a massive spike to the upside in the fall to new 12+ year highs. You can see the wedge already starting to form.
I think this market will continue to grind its way higher, falling enough to keep the bears interested and bulls cautious. We have more earnings next week. I will have the breakdowns for many of them this weekend and throughout next week.
Also this Saturday May 2nd tune in for the live week ahead webinar with JB. Sign up here or if you can't make it check back for the full recording.
Have a great weekend.
Bonus Commentary Below:
As an aside the bear I was alluding to earlier was the "great" Doug Kass, a man who carries a stuffed teddy bear with him where ever he goes.
Yesterday with the market in a free fall he was tweeting away. Telling all of his 80k followers, as he has done countless times in the past, to sell every rip:
The irony is even his longs from yesterday got clobbered. His shorts from yesterday were up huge today and his longs were one of the few red stocks today. He batted exactly 0.000 today. Which is fine. We all have bad days. Suck it up. Learn from it. Move on.... But this is Doug Kass, 80k twitter followers, author, guest on financial news networks.... we should be learning from him... no?
Yesterday he was telling his followers how the bulls vanish when the trade doesn't go their way:
Yet today Kass did just that. After mocking the AAPL bulls (AAPL rallied 3% today) and telling all his followers to go short, with the market rallying over 1%, he just vanished. Gone. Goodbye. See you later. CRICKETS!
And even more amazing is that I have even dedicated a few lines and my own time on this phenomenon. I've realized for me, Doug Kass is like that mass of emergency vehicles on the other side of the highway. You don't want to look. You want to keep looking straight ahead. But for some reason you just have to see how bad the destruction is. For the bears since March 2009 its been a car wreck of historic proportions. Thankfully I am not that ignorant to be shorting and calling the top of this historic bull market at each and every record high. I was a bear a few years after the lows in March 2009, but I changed course. But some dogs just can't learn new tricks.