Sell in April and beat the people who sell in May?
I know it's not catchy, but it does seem to be a reality. Save a momentary drop in oil, it's difficult to nail down many other interpretations for today's positive action.
The only other explanation I can muster? The one I talked about last night on Mad Money: Apple (AAPL). Remember I said that if Apple bottoms, we bottom, because this selloff really accelerated with the decline and fall of the best of the best after that amazing quarter.
Apple has come back to life right on schedule, and the action has emboldened people to buy all of tech and -- with the help of an amazing quarter from Gilead (GILD) -- all of biotech, too. (Kudos to Growth Seeker's Bryan Ashenberg for nailing Apple supplier Skyworks Solutions (SWKS) ahead of its marvelous quarter. It helped, too.)
I don't think we are necessarily out of the selling woods, however, because we are in a real conundrum. Investors had been favoring the stocks of companies that do business just in the U.S. That makes sense; these companies aren't being hurt by the U.S. dollar's strength. They don't sell overseas. But in April the dollar fell hard. So suddenly, these same companies lost their luster and their tailwind. That means investors are now wary of the same domestic stocks they loved just four weeks ago.
Investors had also fallen head over heels for companies that benefit from lower gasoline prices. However, in April, oil had its biggest rally in years, rising 25%. So those stocks fell out of favor, too.
Nevertheless, it isn't as if those companies that sell overseas are doing well, at least not yet. These companies have tremendous earnings risk.
Put it altogether and pretty much everything had gotten treacherous during this sea change that sent oil up and the dollar down. Neither fit into the script of what was liked.
I always tell you that Wall Street is one big fashion show, and what was in vogue -- domestic-levered to low gasoline -- now feels like something that was just a passing fad.
This whole pivot wouldn't be as painful as it is if we weren't in earnings season. Every good number from the domestic companies is either viewed as the last good number because gasoline is now going higher, or it is viewed as nothing special because portfolio managers are itching to put money overseas -- but not until earnings season is over, because the current quarter only encompasses a period where the dollar was in ascendance.
To put it in English: No stocks are in favor right now -- domestic, international, you name it.
So enjoy today's respite and maybe Monday's glow that comes from the Berkshire Hathaway's (BRK.A, BRK.B) annual pilgrimage this weekend. Who knows how long it will last.