This market keeps defying the bears
Given the dramatic run that rests on positive news only, it's time to trim.
Can the Standard & Poor's 500 ($INX) actually go up for an eighth straight session? That would make for the longest winning streak since the beginning of July, when the 10-year U.S. Treasury at last settled in after a wild ride. Can the market really be on the verge of taking out the early August high that is tantalizingly less than a point-and-a-half away from the current level?
Sometimes I think that I shouldn't even bother to ask anyone because this market just defies and defies and defies the bears, and is climbing the steepest wall of worry I can recall in recent memory. No, it is not as dramatic as the wall scaled after the financial meltdown, the climb that began in March of 2009.
But it is dramatic nonetheless, and it rests on two different pillars. First, it only sees what's good, and not what's bad, or it spins the bad in a good way. Second, when domestic issues get rough, it shifts focus to something that's positive globally -- and vice versa.
Wednesday, for example, was a quintessential day in this bizarre bull run. Instead of fleeing the homebuilders on some incredibly horrendous mortgage-applications number, bulled-up investors bought these stocks, betting that the worst must be over. Talk about turning a negative into a positive. Meanwhile, not since 2008 have we decided that China has now trumped our own ability to move the cyclical needle. Ever since the Baltic Dry Freight Index bottomed in August and has never looked back, we have seen industrials catch bids in any moment when there's been dramatic stock-market weakness.
So who am I to say that now, with some Syrians firing missiles at Israel's Golan Heights (did anyone not see that coming?) that the market will at last break its winning streak?
We saw some truly terrible numbers Wednesday night from Vera Bradley (VRA) and Men's Wearhouse (MW), on top of cautionary guidance from PVH (PVH) and hideous outlooks from Francesca's (FRAN) and Jos. A. Bank (JOSB). Despite this, though, for all I can tell that someone will see a silver -- not moth-infested -- lining in the apparel stocks. Maybe they will just go buy shares in TJX (TJX), the closeout company, to exploit the trend.
To me, it is again time to trim into an overbought stock market, something we have done pretty much every single day this week for Action Alerts PLUS. Believe me, we would do even more trimming if we weren't so darned restricted in the stocks of so many companies, as we tell subscribers in our alerts every day.
That said, I know this: Even after the market roared up eight straight sessions in early July, you didn't get the reckoning until August.
Somehow, I think this time we could be in for a quicker selloff when the streak is broken, given that we have seen some serious deterioration in both the home and retail-apparel sales departments. But that's been a "too-cautious" outlook for days now. In the end, you always have to go with the disciplines that brought you here, and we are not buying anything for the trust, at least until we raise even more cash. Anything else just seems imprudent, given the amazing run that the cruelest month has already given us.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and is long PVH.
More from TheStreet.com
It is funny to see the same thing happening with Auto sales, School Loans and Credit Card debt that happened with Housing...... Not enough consumers to satisfy the greedy no problem lower the bar and sell ..... sell...... sell. When the shlt hits the fan........ Woops.. We need a bailout. Guess what responsible tax payers... You were once again an un-willing consumer to suit the greedy pigs by using the useless hoard...... Ha Ha Ha...... what a joke.
the market may simply be seeing a slow continous drip of money flowing in no matter what the market looks like.
people who yanked their 401K money OUT a few years back are now stepping back into the pool. either moving cash from safe to "risky", or simply restarting the funds with their employers.
so much of how the markets grew in the 80's when 401K's and IRA's were basically born, it's simply the flow of new money in that raises the markets. not a function of fundementals.
trouble happens when CEO's think they are gods and think their actions are actually the REASON for the markets to go up
Yes, Fatty.....I stuff Miss Lilly, "once in a while."
The Weirdo I was referring to, was YOU.!!
Good investing to all...
"The OTC derivatives reform effort fits in very well with the broader reform agenda, but there are significant risks that we will fall short in this arena relative to what we are likely to achieve elsewhere," he said in prepared remarks to a derivatives conference in Paris. Dudley, whose branch of the Fed directly oversees Wall Street, acknowledged that swaps rules are more difficult to implement than bank-capital rules, for example. But as it stands, he said, the Fed and other regulators cannot determine the amount of risk that remains in the system, or how secure is its infrastructure."
I wanted to post this for all readers who are tired of MF Cat trashing my posts. JUST the US share of derivative exposure is $630 TRILLION now. Globe wide... paper & electronic currencies, debt instruments and derivatives FAR EXCEED $1 quadrillion now. We haven't had an economy in at least 5 years and without one, we cra**** a guaranteed inevitability. For the narrow and closed minded... derivatives have never been reconciled, so they very well contain fake and dark pooled money. Derivatives PRIORITIZE ahead of stocks, bonds and secured positions. If you haven't grasped what I've been saying since 2009... YOU have nothing... nada... stocks cannot liquidate- the bonds for redemption are worthless and everything else including real estate and metals isn't worth anything without viable currency. Sell now FOOLS... better to drive a burning car into the river than to go crispy while it is artificially forced to continue down the road.
"Two mortar shells fired from Syria landed in the southern Golan Heights adjacent to the Israeli-Syrian border on Thursday.
Initial evidence suggests that the shells were a result of errant fire from Syria's civil war that accidentally entered Israeli territory, the IDF stated."
Apply some rigor to your journalism ....remember you are not supposed to be a shill for dershozitz and peretz anymore !!
Will this dishonest manipulation ever end?
-- No Syria war,
-- Taper now and get it over with.
Howdy Doody should have resigned several times, but made Himself a War President for "all the wrong reasons."
One of his objectives was to stay in office and make many he owed favors to....Rich.
That was his "only" ....."Accomplished Mission".
Americans do not like or want change, with especially our Children in harms way...
But as usual, it took several years for our Citizens to realize we were throwing money and lives down a shidthole or into a rat's and flea infested nest.
Now they blame the wrong person for the troubles that were started by GREED and REVENGE.
I will never forgive the "former" for that; And yes, "I was agin' him and not fer him."
So in reality the Markets aren't defying anything, YET. But oh when it comes time to pay the piper, Jimmy will be singing an entirely different tune. His first words will be, but nobody saw it coming, when in fact, almost everyone saw it coming.
Copyright © 2014 Microsoft. All rights reserved.
These hot movers could rise by double digits in coming months.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.