Today's the day when many investors ask themselves: where are the sellers? Where are the people who bit when JP Morgan's Steve Tusa took 3M's (MMM) stock from a hold to a sell 15 days ago? It went from $213 right down to $209 almost immediately, and now it is back to $215 and change. Aren't there people desperate to get out? What gives?
How about the call to sell Johnson & Johnson (JNJ) from Goldman Sachs back on Sept. 20? The stock stood $133 back then and here it is, just a dollar away!
Might be the right time to take action.
Where are the sellers from Intel (INTC) who didn't like the Mobileye purchase four points ago? Nothing's happened much of note. The same people who didn't like the Cisco (CSCO) quarter still lurk. But they are muted.
I wonder where all of those sellers of Travelers (TRV) went to, the ones who dumped it from $123 to $115 on Florida storm damage not knowing that Jay Fishman, the late Travelers CEO, stopped writing property and casualty insurance in Florida after hurricane Andrew in 1992. He said long before he passed away that he could never be compensated for the risk, so why bother?
Will the real Home Depot (HD) sellers please stand up, please stand up, please stand up? Honestly, if you really thought housing was dead, don't you want to double-sell here? Is this a chance to a lifetime to unload this retailer that is going to be crushed by Amazon's (AMZN) tie-up with Sears (SHLD) ? Yes, Sears! Isn't that just going to skim Home Depot's appliance business alive?
Why aren't the sellers of TJX Companies (TJX) making themselves known, now that we are at the point where they are just putting away merchandise from the big department stores, setting themselves up for a fantastic holiday season?
And what's with all of the people who pounced Federal Express (FDX) when it announced its allegedly disappointing quarter not that long ago?
The answer is that there are two kinds of sellers in this market: hedge fund sellers, who react off of research, and portfolio shufflers, who buy and sell ETFs and index funds.
The former jump on anything, right or wrong, as long as it is actionable. Sure, if PepsiCo (PEP) has an organic growth shortfall, as we said could happen in our Action Alerts PLUS bulletins last week about PEP, it could get hammered. That's a change in the margin of a bad group. But most of the "valuation" calls analysts make, shy of catalysts, only produce hedge fund jumps.
The latter, the index funds and ETF traders, rarely jump although they may press down harder on a bedraggled ETF, like one that includes the consumer products group.
But there are two kinds of buyers. The opportunistic buyers and the index buyers. The opportunists think that the downgrades are noise and give them a chance to buy high quality stocks with the money that comes in over the transom.
The index and ETF buyers? Well, they just buy.
The dichotomy explains a lot of the bullish action, and isn't talked about enough. You see the sellers off those research calls? They were either shorts, or people who hadn't done their homework, because nothing really happened to justify their actions.
But the buyers?
They lurk and wait and pounce.
So today, the third day of a new trading period, which is typically the day we see sellers after two up days, take a look. Maybe they are ready to give you the bargains you have lacked these last few days.
Judging by the stocks' performances above, they might be worth taking.
Join Jim Cramer, CNBC's Jon Najarian and Other Experts Oct. 28 in New York
Jim Cramer will host CNBC's Jon Najarian, TD Ameritrade's JJ Kinahan, famed analytics expert Marc Chaikin and other market mavens on Oct. 28 in New York City to share successful strategies for active investors.
You can join them as they discuss how smart investors can make the most of options trading, futures contracts, fundamental and quantitative analysis and great ETFs to buy right now. Participants will also get a chance to meet Jim and other panelists and take photos.
When: Saturday, Oct. 28, 8 a.m.-3 p.m.
Where: The Harvard Club of New York, 35 West 44th St., New York, N.Y.
Cost: Special sale price: $150 per person. (Normal price: $250)
Click here for the full conference agenda or to reserve your seat now.