Charts Show Power of the Bull

 | May 13, 2013 | 1:26 PM EDT  | Comments
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Stock quotes in this article:

mmm

,

emr

,

cat

As I perused the stock charts this weekend I saw several amazing patterns, ones that take your breath away.

First, when stocks rally in advance of a quarter and the quarter is good, the stocks keep advancing. That's highly unusual. You would expect some sort of pullback, wouldn't you? The news should have been discounted, no?

It hasn't been that way.

Second, when stocks gap up on good news they go higher still. That's remarkable. Lots of times stocks fill in the gaps. Not this market.

Third, when companies report bad news, even when they give you very little hope that things will get better like 3M (MMM) and Emerson (EMR), they get hit and then they bounce back, with the bounce taking the stocks above where they were BEFORE the disappointment. Caterpillar's (CAT) up an amazing 8 points from its disappointment.

This is extraordinary. In fact, it is unheard of. It makes it so declines truly are buying opportunities.

We know lots of people don't like this market. But one of the reasons I think they don't like it is that you don't get many chances to be in it. Now there are some stocks that can't seem to catch a break. The materials stocks are just awful and any times we try to buy them for our charitable trust we feel like we are running into a buzzsaw.

The brokerage stocks aren't faring that well. And anything related to the storage of data has been pretty horrible.

Otherwise, the power of this bull is underestimated by all.

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