People seem caught. You have gold down again. You have banks rallying. You have an absence of European bank raiding. You have a durable goods number that, while it does not include August, does raise the question about how weak July really was. Sure, August had the disgusting rancor, but July, as I have written here many times, was supposed to be a disaster, even though the retailers could not confirm this, and the auto companies couldn't confirm it either.
Plus we are beginning to have some comebacks in the incredibly beaten-down industrials, perhaps spurred by the durable goods numbers as well as the pretty amazing lack of a decline in orders from Emerson Electric (EMR).
It's been a long time since we haven't had one-day wonders. There was ample time to unload your banks and techs this morning, but the buyers swooped in and just didn't let things stay down. When you consider where the futures were some five hours ago, you have to admit that we are having a rather remarkable session, short-covering or otherwise. Of course, a sell program like the one we are having can still decimate any move, but remember, the leadership is still there, lurking, waiting for the program to end.
Of particular interest for me is the action in the two strongest growth accelerating names: Apple (AAPL) and Google (GOOG). I can't tell you how important leadership is -- see my early morning checklist -- and when you combine the moves in these two with the bounce off the accidental high-yielders I like to focus on (DuPont (DD), Nucor (NUE) and Eaton (ETN) being great examples) and overlay that on an absence of news in Europe, verified by the second day of a gold decline, you find yourself in a pretty constructive mode.
The shorts are going to feel it, because they have year's results to preserve, too. Bernanke has not proven to be a disappointer as far as the stock market is concerned, and the leaders are all on vacation.
Of course, I will give my non-due to the high frequency traders. They will most certainly exaggerate a move upward -- which I hate. And in the time it took to write this piece, Apple got hit from the program hard. But I still think it can hold a large part of the big gain from yesterday
So, all in all, a positive environment.
And don't forget, the sucking chest wound that is Bank of America (BAC) is taking a much-needed breather, and BAC is a stock that reflects a bank that is way too important to keep going down without consequences.