This Is Incredibly Bullish Behavior

 | May 22, 2013 | 1:47 PM EDT  | Comments
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Stock quotes in this article:

regn

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sny

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biib

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celg

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gild

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hd

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wfm

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jpm

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sbux

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line

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adt

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FB

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vale

In a bear market nothing gets its due. In a bull market, positives get their due over and over again as stocks are reweighted constantly.

Take one of my faves, Regeneron Pharmaceuticals (REGN), which really should be called Regenerous Pharmaceuticals. We know that Regeneron has the best drug for macular degeneration because it requires far fewer injections in the eye than the other guys.

But yesterday the company, along with Sanofi (SNY), released data that showed Regeneron has a new drug that can be used for severe asthma. It also might have a lot of other uses. Bingo. Rather than people saying "that's in the stock," it embarks on a new move up.

And let's take Biogen Idec (BIIB). It is well-known that its new anti-MS drug is doing well. But every time we heard new reports about it, numbers go higher and its stock goes higher.

Celgene (CELG) and Gilead (GILD) have terrific franchises, as we know, but the possibilities of new drugs to be shown at the upcoming ASCO conference are driving them higher once again. As if no one suspected this. I thought for sure the good news was "in the stocks," but it isn't.

Plus, we get these second- and third- and even fourth-day moves on the same news. Yesterday Home Depot (HD) reported a terrific number and the stock flew up. It's on the run again today. That's extraordinarily bullish. Whole Foods (WFM) is now up 15 points on the same quarterly earnings news.

JPMorgan Chase (JPM) has been going up on news that the economy might be getting better and then, suddenly, an analyst raises numbers and it leaps again. That's crazy. It's been going up the whole time on expectations of better-than-expected revenues and earnings and then, when an analyst points it out, it goes higher again.

Some stocks go up without catalysts at all. Look at Starbucks (SBUX). It's up five points since it reported what some called a disappointing quarter just a few weeks ago. I now expect that an analyst will, tomorrow, raise numbers and bull it higher.

I could go on and on with so many stocks.

The behavior is truly extraordinary. Now some stocks can't lift at all. I am watching four that Action Alerts PLUS owns: Linn Energy (LINE), ADT (ADT), Facebook (FB) and Vale (VALE). They are hammered mercilessly every day. I severely doubt the selling is done by longs. These stocks can't go up unless they preannounce better-than-expected earnings as they appear to hedge funds as risk-free shorts. I don't think they are; just the opposite. But I can read a tape.

But they are, total aberrations.

Otherwise most stocks just seem unable to stop once they are propelled higher. When they stop to breathe, it's when you can pounce. That's been your only chance.

It is incredibly bullish behavior. But when you point it out, you are immediately branded as a cheerleader, as I was this morning on Twitter @JimCramer. That's one reason why so many ignore this phenomenon. You point it out and you are subject to ridicule. You say nothing or you denigrate it you have a huge amount of support.

I imagine that until that asymmetry turns around, the move could very well continue.

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