A Market of Quick Reversals

 | May 15, 2013 | 6:57 PM EDT
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These battles, these skirmishes, are amazing. They are playing out so quickly. Take Cisco Systems (CSCO). We had multiple comments in the last few weeks that Cisco was going to miss the quarter. We heard that it would talk about weak revenue. We heard that it was going to be a time of reduced guidance. We even had a hideous "Performance Slows With Age at Cisco" story in the Ahead of the Tape piece by Spencer Jakab.

Then we had one of the best quarters and best outlooks that Cisco CEO John Chambers has given us in years. Let me tell you that if I had made any of these comments, I would have to lead tomorrow night's show with an apology. You will hear nothing from these analysts, nothing at all. And Spencer Jakab? On to the next.

Or how about Tesla Motors (TSLA)? Sure, in the $30s, $40s and $50s the company didn't need equity, and that got the shorts by the neck. But then it almost doubles, and the company needs equity. The stock goes from $91 to $84 immediately. Then we see the CEO Elon Musk buying half the equity, and then it goes all the way back and then some.

All of this playing out in seconds.

Even after this run, we still have big hedge funds trying to prove their short points every day. Our Action Alerts PLUS charitable trust is in three battleground stocks, of which only two are worthy of battleground status: Vale (VALE), ADT (ADT) and Facebook (FB).

Vale is a little ridiculous. It has been more than cut in half. If China has two good back-to-back numbers, it's at $20. But because of the way things work, it feels as if it has to go down every day until it gets good news. That's not how stocks naturally trade. It's really just guys whacking bids knocking it down.

ADT? The shorts are having a field day with it, and the company doesn't know how to play the game and defend itself, giving guidance and then falling flat on the guidance and not actually thinking it matters.

Facebook? What can I say? The shorts love to beat up on this.

You can tell these games, because you start to see bid after bid after bid whacked out but nothing in size. Just peppering and peppering to knock it down.

That's total bear market behavior. But don't kid yourself that these are motivated sellers, motivated to make the stock look bad.

So it's no different from the old game for these stocks, and that makes them so hard to own, even if you think they represent value.

Much better just to own something non-controversial, because controversy means "hair," even with this bull tape, so the values you think are there simply aren't going to surface anytime soon.

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