A Market Like Manning?

 | Oct 16, 2012 | 7:03 AM EDT  | Comments
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The charts were so hideous, almost every one I looked at. Yet we had a terrific rally yesterday. Just shows you how deceptive everything can be.

What turned it around? I count five reasons that just might have some staying power, no matter what happens in tonight's debate.

First, Europe's bond markets have gotten quite good of late, including the Greek market. We have been suffering from a European hangover pretty much every day for the last couple of weeks. The strength in Italian bonds vs., say, last year is remarkable. No wonder there's a bid every morning in their stock markets. 

Second, the negative Apple (AAPL) stories have dogged the stock market, yesterday was the first day I heard people say that perhaps if Apple bounces off the low $620s it is time to buy. It did. Soon there will be people who say that the downside in Apple may actually be less at this level ahead of earnings than the upside. When was the last time you heard that about this stock? (Even my hatred for tech has limits).

Third, when Citigroup (C) reports there's usually some flaw that brings the whole deck of cards down, but not this quarter. The emerging-market surprise took everyone by storm. The net interest margins were good. The commentary was almost uniformly positive, except for the one area everyone else is raving about: housing. It was an oddly good quarter. 

Fourth, regarding Sprint (S), the idea that there's $20 billion somewhere, anywhere, that could be headed to our markets actually mattered tremendously. Just a huge, out-of-nowhere box of confidence. But I still think that the tower stocks and Clearwire (CLWR) should be sold. 

Fifth, we get a lot of different macro numbers. Somehow this retail sales number yesterday morning has become like a mini employment number. Things trade off of it. The apparel companies and many of the retailers all took off as soon as we saw it. I am noting once and for all that this retail sales number is regarded, in this era, as actionable.

Ton of new data today and a big debate tonight. Still, the takeaway is that coming into Monday's session all I saw where charts that were breaking down, except, notably, the transports. Coming out of Monday's session I saw stability where there was none.

Maybe, like the second half of the Broncos-Chargers contest, it's a new ballgame?

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