Reading Into the Fade

 | Apr 25, 2013 | 3:03 PM EDT  | Comments
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Stock quotes in this article:

ibm

Fade!

There's a pattern we haven't seen in a couple of days. When I think fade, I think, OK, what's going to happen in China or Japan or Spain or Italy that someone knows that I don't?

I never think that it fades on its own volition these days. It is not inside information to know that Cyprus isn't collapsing, that Europe's burning, or that there will be some awful surprise out of China tonight.

But what's interesting until this reversal is that this is a market led by old tech and old bank, and if we are going to break out to new highs in the S&P 500 then we need those groups to do it.

I think the reversal in IBM (IBM) allows some nice sentiment to creep into the market. It's kind of like the reversal in Caterpillar (CAT), meaning people seem to believe that it's reflecting everything bad, the way it was reflecting everything good before the quarter.

Maybe it is the blessing of youth, but when I met with the investment club at the Villanova School of Business today, the first idea they gave me was IBM, saying they got back into it in the dip because it had gone from being too expensive to being too cheap overnight. As an owner of the stock for the charitable trust, I can attest to that journey.

It is very good news to see follow-through in the beaten stocks (it makes Qualcomm (QCOM) real tempting).

All that said, tomorrow morning, when we find out why people sold, we can simply say, hmm, maybe we circle back to losers.

It's been winning.

Random Musing: Catch you at 'Nova tonight at 6 and 11 p.m.!

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