The New Market Pattern

 | May 17, 2013 | 4:10 PM EDT  | Comments
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Stock quotes in this article:

jwn

,

jcp

,

dell

,

ibm

,

mmm

,

utx

,

csco

,

vale

,

joy

New pattern: A selloff brings out buyers.

One of the most unnerving traits of the old bad days was that when you had a reversal day where the market opened higher and then plummeted, it tended to usher in a real bone crusher.

I thought that would be the case today, especially after Nordstrom (JWN) reported its dog quarter, and J.C. Penney (JCP) and Dell (DELL) failed to impress, either.

Instead, buyers came out of the woodwork in pretty darned shocking fashion. They went back to disappointers like IBM (IBM) and 3M (MMM), so-called disappointers like United Tech (UTX).

What changed?

I think auto registrations in Europe plus good consumer sentiment made this rally.

We are in some sort of super-positive moment that we didn't get crushed today and the key remains that Europe has, in the words of John Chambers of Cisco (CSCO), bottomed out.

This is a bottomed-out-in-Europe rally, and as long as we keep getting good data points out of Europe, we are going to have this kind of day. Who knows what will happen if we actually get good numbers out of China? Where will Vale (VALE) and Freeport-McMoRan (FCX) and the other cellar-dwellers like Joy Global (JOY) go?

Or maybe it is just a matter of time.

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