Rich’s Commentary: I hate to quote myself, (not really; especially when it makes me sound smart); however, in the middle of last weeks market drubbing when traders skipped over their sell buttons and started whacking their panic buttons instead, we stated the following in these pages: Our advice? Lets relax and get a good look at earnings before we reassess the situation... Hopefully calmer heads will continue to prevail. Well, today the World got a good look at earnings, and that little whimpering noise you hear in the background is emanating from the short-seller crowd who got caught betting against America once again!! When will they ever learn?! Coming into Q3 earnings season, the primary concern of fundamental investors was that large corporations would take down Q4 guidance due to the slowing global growth story. Not only were plain vanilla long funds nervous about this developing scenario, but the hedgie-shorts smelled blood in the water and started piling on; adding to large short positions in the Big multi-national Blue Chips. (This explains the exagerrated downside moves we witnessed last week.)... Anyway, this morning, when announcing blow-out earnings and solid guidance, the message from the camps of CAT, MMM, GM, etc was loud and clear: Sorry, dudes! Not this time. Subsequently, the Dow is currently enjoying its single best day of the year... Its funny how that works, isnt it?? --- Moving on, the Dow has taken a break; throwing it into neutral right near session-highs, while volume is above average with ~285M shares on the tape at this time. Technically, short term support/resistance levels are seen at 1934/1942. Meanwhile, in the trading pits, bonds are sharply lower as money managers need to free up capital to buy more stocks with; hence, driving the 10-year US Treasury yield up to the 2.275% level...
Posted on: Thu, 23 Oct 2014 17:36:51 +0000