There's nothing like that moment when many people think things are setting up right for their portfolios and they want to buy more.
Yesterday, for example, people wanted to buy the homebuilders because Lennar (LEN) reported a fantastic number, and that meant happy days were here again. The Federal Reserve sure helped with its talk about how interest rates on U.S. Treasuries wouldn't be going up anytime soon.
But rates went up anyway, and that allows the bank investors to buy more of their stocks, and the whole group is breaking out, though the action is better in some than in others. I reiterate that Stephanie Link -- co-portfolio manager of Action Alerts PLUS -- and I think that AIG (AIG), SunTrust (STI) and Bank of America (BAC) are the best ways to play it. The first one's still recovering from the great recession, and the second two stocks aren't even back to where they had been during the last rate rise.
We saw a lot of the oil companies rise when crude bounced off the $92-to-barrel level. They are in sale mode now, hindered by comments from Continental Resources (CLR) that were really bullish but not bullish enough. Lower oil means lower gasoline, so the retailers take off again. If oil bounces off of $92 again, I wonder if people will say that's the bottom and come for that group again. I sure wouldn't bet against it.
Or how about the situation with the Internet names? First they were all for sale because of the Alibaba (BABA) initial public offering. The cash had to be raised, and these names were the place to raise it. Now they are buys, because if Alibaba opens up big everyone will want these stocks. I think Twitter (TWTR), Facebook (FB) and Google (GOOGL) can all go higher on the back of this deal.
Now, again, if Alibaba opens too high, the top callers will be back and we will see a big repeal of many of these stocks. But, for now, it's all about competing views that have turned positive as we wind through the thicket of the Fed and Alibaba. Don't get cocky, as there's another huge slate of IPOs next week that money will be needed for, and supply fatigue can truly stall a bull market. So far, so good, though.
Random musings: I think Apple (AAPL) will hold up well, and I reiterate that things are going to go smoothly with the iPhone launch and that people will love the new operating system.
