• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

This Is Exactly What the Market Needed

Tuesday's rally was primarily a product of poor positioning and too much anticipatory bearishness.
By JAMES "REV SHARK" DEPORRE
Apr 23, 2019 | 05:26 PM EDT
Stocks quotes in this article: TWTR, WHR, TXN, BLK

For the last couple of weeks many traders have been complaining about a variety of things. Whether it was lackluster price action, low volume, pockets of weakness in health care, biotechnology, cloud computing, etc., the potential for weak earnings or slowing international economic growth, market players were groaning about this market.

This all made for a good bearish argument. However, despite a few tries, the bears couldn't generate any decent downside traction. The buyers consistently showed up, although they didn't do much more than hold support and that produced some very dull and listless action.

In hindsight, it is clear that this is exactly what the market needed in order to make another push higher. Sentiment was downright skeptical and many bulls were concerned that the huge run from the December lows had run its course. They were worried that the tepid action was an indication that a major reversal was brewing.

That set the stage for a classic "never short a dull market" reaction. Good earnings from Twitter (TWTR) , Whirlpool (WHR) and a few others helped to get the ball rolling but this rally was primarily a product of poor positioning and too much anticipatory bearishness.

As the indices closed in on all-new highs for the year, the fear of missing out kicked in, which forced bears to cover and underinvested bulls to look for additional exposure.

With the indices breaking out Tuesday, the big question now is whether they can keep going. Yes, all the same bearish arguments still exist, but staying with the trend has been the winning approach for months and it continues to be the way to go.

After the close, Texas Instruments (TXN) put up a strong report that initially received a relatively favorable response. This could keep the chip sector going, which has been a leading group lately. Other big names are on the docket this week and so far there have not been any "sell the news" reactions.

Quite a few bears scoffed when Larry Fink of BlackRock (BLK) recently talked about a market melt-up driven by fear of missing out. They probably don't find that view quite as humorous after the action Tuesday.

Have a good evening. I'll see you Wednesday.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Rev Shark had no positions in any securities mentioned.

TAGS: Earnings | Investing | Markets | Stocks | Trading

More from Stocks

Here's the Secret to Market Timing

James "Rev Shark" DePorre
May 21, 2022 10:00 AM EDT

You've probably been told timing the market is futile, but here's a way to make it possible -- if you're willing to do the work.

It's Official: That Hairy Animal With Claws and Sharp Teeth Is a Bear

James "Rev Shark" DePorre
May 20, 2022 4:31 PM EDT

Along with the media proclamation of a bear market, we have some improvement in the charts of many smaller stocks, but ...

Applied Materials Slips on Miss: Where Will the Chips May Fall

Bruce Kamich
May 20, 2022 1:00 PM EDT

Let's see what the charts say.

Consumer Confidence Is Shot

Bret Jensen
May 20, 2022 12:00 PM EDT

Until things start to improve for the average consumer, it is hard to see significant upward moves for either the markets or economic activity.

I'm Cautious on Marvell Technology Ahead of Earnings

Bruce Kamich
May 20, 2022 11:52 AM EDT

Let's review the charts and indicators.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 10:10 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    "Market Timing for Dummies"
  • 01:44 PM EDT STEPHEN GUILFOYLE

    Stocks Under $10 Portfolio

    We're making a series of trades here.
  • 03:07 PM EDT PAUL PRICE

    Why Is Walmart Down Big Today?

    Besides its poor earnings report Walmart was way...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login