What's one of the greatest, most telling, hallmarks of a bull market? Resilience.
A resilient market allows you to buy stocks when they get hammered and do so with some certainty that you won't get your head handed to you.
A day like today reminds us that we are in one heck of a resilient market.
What tells me that?
Let's tick the daily surprises down. Exhibit A on the resilience list is Boeing (BA) . Have you thought about the parade of news that has befallen this company after the second plane crash of the 737Max? It has been relentless, everything from airlines pulling orders to stories in the paper about how the FAA is over-reliant on Boeing for approvals. Boeing's stock barely gets dented with orders cancelled or changed. When airline cancels routes - and therefore causes it to lose money because of the Max -Boeing's stock barely gets dented.
When I am out with even the most sophisticated people about the markets some wonder not how the stock can stay up 17% for the year, one of the better performers in the Dow, but how it can't be cut in half. Some wonder how it will stay in business.
But the stock says otherwise. Now Boeing reports next week and you have to figure they guide down substantially given how this is the money plane, the most sought after plane in the world. Or at least it was.
I think that might be the day that the buyers take a pause. I would not buy it until then. But the fact is that this is an insanely reliant stock, a masterful stalwart, the bulwark of the market.
Next, another Dow stock that's incredible: Nike (NKE) . When Nike reported its stock got clocked, because North America was about a percentage point light. I pointed out after it fell six points that the company explained the missing point perfectly and you had to close your nose and buy. Today it's within a point of where it laid an egg, which, of course, it didn't.
Nike's a sensational company. While others struggle in China it has the Sports Ministry on its side. China doesn't make a competitive sneaker. Its come on strong in Europe, and the U.S. will surprise back to life this quarter, I believe, because of better weather. I have to tell you, the real essence of what makes Nike great is the thirst for the limited edition Nikes that trade on Stockx. Nike's a remarkable mass/cult product like the earth has never seen.
How about this one: A month and a half ago UBS downgraded Caterpillar (CAT) from a buy all the way to a sell. It's the closest thing to saying "get out now." So how have you done in the interim. You are up a couple of bucks. When I heard about the double downgrade I presumed we were going to get hit with some monstrous news. We've been hit with nothing. The stock is saying that when Cat reports next week you want to be long it, not short it. Your call, I will take the long side.
When Home Depot (HD) reported at the end of February we heard about a quarter that was light and a forecast that was weaker than anticipated. At the time I argued that every bit of that characterization is misleading and that the quarter, ex-horrendous weather was actually very good. The company could not have been more bullish despite the weaker housing market. Yet the stock fell from $188 down to $180 in a cascade of selling. It was like a jailbreak.
What's happened since? It's been up pretty much in a straight line as we subsequently heard from a host of other retailers who complained about February's weather and we got a sharp decline in interest rates which spurred a very big swing toward anything housing. If you wait for Home Depot to give you the all clear, which they will give you when they tell you how well they are doing in lawn and garden, you will be way too late. I know this because the stock has skyrocketed to $204. You ever want to doubt this management again?
One of my favorite retailers, Five Below (FIVE) , reported a quarter that was panned for some choppiness not that long ago. It fell from $129 in the middle of March down to $117 at the beginning of April after it guided down on its forecast -32 to 35 cents instead of the 40 cents the street was looking for.
But now the stock, aided by some upgrades including one from Goldman Sachs and another by Matthew Boss, who downgraded it at the previous high and then upgraded lower, is soaring and just hit its all-time high at $138. Now that's textbook resilience.
For months Western Digital (WDC) , which makes flash memory and disc drives, has seen its numbers cut on Wall Street, a victim of oversupply in the NAND market. But the stock refused to go down. Micron (MU) , too, has repeatedly been subjected to downgrades as both of its products, DRAMS and NAND, have languished and drifter lower. Today we got the call I have been waiting for, a head's up by Deutsche Bank calling for the elusive second-half recovery.
Once again the stock's been right and the doubters have been wrong. Why is that? Because the buyers see how resilient the stock is to the plethora of downgrades and that means, for those who have been around long enough, that pricing will turn.
Same goes for Micron. These just won't go down and you have to take your cue from the stock on these, not the analysts.
How about Dow (DOW) and DowDuPont (DWDP) , the former owner of Dow. Before Dow split off from DowDuPont the company gave you one of the most downbeat forecasts of any industrial. What happened? The stock got hit but by the end of the day it turned around and it's been rallying ever since. Not only that, but the spinoff, Dow, has been a fantastic performer when people realized it would pay a very big dividend - the biggest in the Dow.
You had to buy at its ugliest moment.
How about Facebook (FB) ? Today we learned once again that Mark Zuckerberg did something with data that you posted that you knew could be seen by anyone and you had no guarantees whatsoever of a penumbra of privacy. The whole thing seemed wrong and you hated that he sold you out. But he insists he didn't sell you out. He did an Op-ed piece about what a good guy he is and people snapped it up. Some may have thought that these new revelations violated his rules of privacy. But you know what the truth is? The people who should care, don't. Admit that you had many more advertisers leave YouTube because the company put content against the scatological then you have had them leave over a crisis of consciousness. Memo to everyone currently investigating Mark Zuckerberg: the Pulitzers are out. No one won one for this stuff. You won't win now. The fact is that Instagram is now the single best place to advertise, to the point where the rates are going up and up and up still. Facebook's biggest problem? Trying to keep the rates from getting too expensive. I am calling that a high quality problem.
Finally there is Apple (AAPL) . Can you believe this stock has run all the way back to $200 after being subjected to some of the most pronounced selling I have ever seen? After hitting a rock bottom of $141 when it told you that sales were weaker than expected, its been pretty much straight up ever since. Incredibly there is no real news here. We haven't seen anything that confirms that sales are better. We don't have a trade deal with China. We have new products that aren't regarded to be additive: the Goldman (GS) charge card barely mentioned, the TV ever-so-lightly sketched out. We know there are some health initiatives but nothing that we can pin down to praise.
Yet the stock's been a rock. You had to own it not trade it.
Not everything can bounce. Right now the stock of UnitedHealth (UNH) is in free fall after a fabulous quarter that actually had the stock up 8 at one point. But it's healthcare and healthcare's in an election scare that might not let up any time soon. It's not resilient.
But the rest of the market. It hangs in like Mohammed Ali did, rope-a-doping its opponents until it knocks them on to the canvas.
(Home Depot, Five Below, Dow, DowDuPont, Facebook, Apple, Goldman Sachs, and UnitedHealth are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells HD, FIVE, DOW, DWDP, FB, AAPL, GS or UNH? Learn more now.)