There's just not enough money out there to support more than a handful of groups going up at once. The concept of "the market" is failing badly because underneath that broad rubric is a disturbing have/have-not tendency that makes the market seem less treacherous than the averages indicate.
Right now, for example, we've got the retailers, the restaurants, the consumer staples and the industrials just marching relentlessly higher. But it seems to come at the total expense of the pricey, fast-growing Internet, tech and biotech stocks. It's that concept of the rolling bear market I keep talking about, where groups that were clubbed and crushed get resuscitated, while other stocks just get pummeled and almost seem poised for a meltdown.
Look at the action in today's session. I see buyers lurking almost everywhere for retail. Macy's (M), which had been a one-way ticket to the danger zone, is now bottoming and rallying. Target (TGT), which had stalled badly in the mid-$70s, now looks like it can break back to the $80s, where it had been before the company threw cold water on a higher-estimate scenario when it reported last. Lucky Brands puts up much-better-than-expected numbers and goes to an all-time high. Costco (COST) puts up what looks to be weak same-store sales numbers, yet people are willing to do the math, back out gasoline and foreign exchange and glom on to the plus-8% number that's spectacular. A week ago they wouldn't have bothered. They would have just sold it.
Look at these restaurant stocks. Chipotle's (CMG) challenging its highs. McDonald's (MCD), freshly rejuvenated by new CEO Steve Easterbrook, just hit an all-time high. That's before the numbers have even turned. How long before Buffalo Wild Wings (BWLD) regains its momentum? Or Jack in the Box (JACK) comes back? Why not? DineEquity's (DIN) on a newfound roll. Denny's (DENN) seems back on track.
How about these consumer packaged-goods stocks? Clorox (CLX) continues to roll up higher on no new news. Procter & Gamble (PG) hasn't said anything to encourage this buying. I think Kimberly-Clark (KMB) has become go-to again after a prolonged period in the wilderness.
And then there are the industrials. What an embarrassment they had been. For ages, we saw breakdowns in every company no matter how good they had been doing. Boeing's (BA) a prime example. It's been crushing it in orders, but the stock's been crushed. I had begun to lose faith in the momentum of Honeywell (HON) and 3M (MMM). That seems now to be premature. There's not been one good word about the numbers from any railroad, yet the group's been on a tear that would make you think coal's coming back into style. I sit there and marvel about the run Union Pacific (UNP) has had off the bottom. (Boeing and Union Pacific are part of TheStreet's Trifecta Stocks portfolio.)
The love continues to extend to old tech. IBM (IBM), after being a black hole for your capital, has found its footing. The soon-to-be-split Hewlett-Packard (HPQ) has buyers all over the place. You can't beat them away with a stick. Oh, and of course, the biggest buyer of all, the incredibly shrewd Michael Dell has apparently struck a deal, according to my Squawk on the Street colleague David Faber, to buy EMC (EMC), the ultimate laggard hardware company. You want to sell to Michael Dell? You want to abandon a group when he's rushing into it? Oh, and let's not overlook the quiet, firm run in Cisco (CSCO) and Juniper (JNPR), both of which had been dormant for what seemed like ages even as they have put up relentlessly good numbers of late.
Then there's oil. The great bear market that obliterated these stocks seems to have ended with a chainsaw to the necks of the grizzlies. Four weeks ago, if you got near one of these stocks, you were mauled beyond recognition. Now, with just an $8 move in oil, you have rallies galore in everything from Exxon (XOM) and Chevron (CVX) to Marathon (MRO) and Encana (ECA), to name two with the best balance sheets and two with ones that hardly passed muster.
Now, where's all this money coming from? Is it from over the transom? Have investors rediscovered stocks as a way to build capital?
These bull markets are being fueled by the extraordinary bear market in anything with real growth. Let's start with FANG: Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Google (GOOGL). The news flow out of Facebook is so positive, the uptake from all divisions so strong, the research so upbeat that you'd think this one would storm through the $100 gates. Nope, the low $90s repulses it like a wall of barbed wire and Claymore mines with machine guns producing interlocking fields of fire.
Amazon's a tough call. It had been the best in FANG as of late. Now, though, it's got that source-of-funds feel, as we call it. Netflix seems like it is fighting to keep the ground it's gained, and Google got pushed in a thoughtful note from Baird titled, "Peeking under the Alphabet Hood, maybe the next GE." OK, put aside your current perceptions of GE (GE), or at least the ones we had before Nelson Peltz took a stake in it, announced last weekend, because it's been nothing but net. This report talks about how Google's giving you businesses with billions of dollars in potential revenues now and then billions in the future under its alphabet factory. I thought someone would look under the hood today, but this car's been wayward for ages, a driverless car that's stalled at best and is bouncing off a retaining wall on days like today. (GE is part of TheStreet's Dividend Stock Advisor portfolio.)
And those are the good ones. I want to put a GoPro camera on the stock of GoPro (GPRO) to show you what it looks like for a stock to crash. I want a mobile-eye device on the stock of Mobileye (MBLY) to show you what it's like to have a head-on collision with a bear driving an 18-wheeler.
Will someone please put biotech out of its misery? After a one-day short squeeze, the bear appears again and the ugliness is renewed. Now they are trying to mount a comeback, but I think it's a guilty-until-proven-innocent bounce.
Apple's (AAPL) not helping. Here's a hybrid -- it's actually a cheap stock on earnings but it trades like a high-growth stock; guilt by association perhaps? You had not one but two analysts saying the earnings estimates are probably too low. You would think someone would care. Hardly.
And woe to any company that supplies to cellphone makers when the best of the best, Skyworks (SWKS), keeps going down in a blaze of glory. Sure, it's still up 7% for the year, but it's down a staggering 34 points from its high and is being clipped for five points today alone. What's wrong? Nothing. In fact, the company pre-announced much-better-than-expected earnings just the other day. No one took notice. No, actually, they took notice and sold anyway. (Amazon, Mobileye and Skyworks are part of TheStreet's Growth Seeker portfolio.)
Only Twitter (TWTR) seems to have a bid underneath. It helps that a canny Saudi Prince Alwaleed has doubled down on his position. It's even better if you bother to look at your Twitter and realize that the pace of innovation, including Moments, is in hyper mode. I love it. (Apple, Cisco, Facebook, Google, Honeywell, 3M, Target and Twitter are part of TheStreet's Action Alerts PLUS portfolio.)
The rest of pricey tech, though? No bids. A fast descent into oblivion.
What's happening? How can this be occurring? All I can say is that investors right now want to pay less for earnings than they did two weeks ago and they want to avoid the shares of companies that have no earnings but terrific revenue growth, like Pure Storage (PSTG), a company with a disruptive technology that truly is the better mousetrap to all the current forms of information technology storage, especially the one that's selling out to Dell, EMC.
Now before you panic and join this rotation, remember two things. First, we are about to go into full-throttle earnings-season mode and I think many of these now-loved companies may not report the brightest of quarters. Given their run, they could get clobbered right back to where they started. Meanwhile, the high-growth companies have become so cheap that many, like Apple, Gilead (GILD) or Celgene (CELG) and even Skyworks, have become value plays. In other words, by the time you catch up to the bull, it morphs right back to the bear as the money flows right back from whence it came.