More Negative-to-Positive Action

 | Jul 11, 2014 | 3:31 PM EDT
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The resilience of this darned market is incredible. For the longest time we have seen stocks get hit on day one, only to start recovering midday through day two.

But now we are seeing afternoon turns to the positive after snap judgments are made right at the opening. That's what happened with Wells Fargo (WFC) as traders decided to dump the stock because the net interest margin was ever so slightly worse than expected. Smarter heads prevailed later, though, as the trillion-dollar deposit number sank in and the amazing mortgage growth supplanted the negativity.

This turn comes on top of the remarkable continued gains in Alcoa (AA), the other big company that reported this week. I am amazed that a stock that had run so much going into the quarter could move up once again, but it was truly a heck of a good number.

I wonder if next week the market will make a U-turn on how it feels about the price of oil. All week, oil went down, and that created an uncomfortable feeling among many that the economy must be weaker than expected. I think the weakness has to do with supply, including a lack of supply interruption in Iraq and a huge increase in production in this country, and next week we will probably start to see sentiment change and money flow into the consumer stocks that benefit from a decline in oil and, concomitantly, gasoline prices.

The instant negative into delayed positive story has been the story of 2014.

Next week should be no different. 

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