Market players were caught by surprise by a strong open this morning. A big gap is forcing bears to deal with stops on their short positions and is causing underinvested bears to chase to add some long exposure. The longer the indices stay above the opening lows the greater will be the anxiety to reposition for more upside.
This action is a good illustration of something that Doug Kass says often which is that the market has no memory from day to day. The inverted yield curve worries and the concerns about slowing economic growth have totally vanished. This may have something to do with the fact that we are approaching the end of the first quarter and there is some pressure to do window dressing, but mainly market players are just focused on staying on the right side of the action.
A few things I wanted to add such as StoneCo (STNE) and Zscaler (ZS) jumped too quickly so I don't have the size positions I'd like. I am watching for a few other things to develop as the day progresses and will put cash to work if I can.
Right now this market is looking like it just had a little routine bout of profit taking and is now back to work. There is always some good justification, like an inverted yield curve, when profit taking hits but in a strong market those sorts of justifications are quickly forgotten.
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