The bounce started slowly this morning but it has been improving all day. The DJIA has been leading primarily due to strength in IBM (IBM) on a two-level upgrade but the S&P500 and Nasdaq are catching up on news that Apple (AAPL) will be paying $38 billion to the U.S. to repatriate its overseas cash hoard, and will contribut more than $350 billion to the U.S. economy, creating more than 20,000 jobs in the next five years. Those are pretty remarkable numbers and AAPL is shrugging off some lackluster analyst comments as a result.
Many bears have been questioning this market rally for a while but those numbers from Apple are giving the bulls good reason to stay positive. This tax bill has had a major impact on corporate earnings and it is very likely we will hear very positive comments in the next three weeks on first-quarter earnings calls.
Yesterday's selloff is looking like just another one-and-done event. Anyone betting on downside follow through is providing some short covering fuel today. As I have said so often -- strong markets stay sticky to the upside. They don't just fall apart.
The selling yesterday was quite beneficial as it helps to sort out some of the better setups. I see a number of little stocks like UTSarcom (UTSI) , Genco Shipping (GNK) , Phoenix New Media (FENG) , Sanchez Energy (SN) and Apptio (APTI) which pulled back, found support and are now turning back up.
There are going to be some good plays in many stocks on optimism into earnings. The buy-the-dip routine may be getting old but it going to keep working as we move into earnings season.