Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
I don’t feel quite as befuddled as I did a few hours ago as quite a few people I respect in the Twitter-sphere have all commented on the same action I noted earlier today. Most of the leadership stocks (what few there were outside of utilities , REITs and MLPs) are treading water or rescinding, while the broken stocks of November and December are bouncing big. A few of my watch lists look like a day where the market is +/- 0.1% – a few actually have more red than green in them. So at least I am not alone in the Twilight Zone as I compare my watch lists with the broader indexes.
Now we have to see if this is a 1-2 day situation (neutral to bearish) or if we have a sincere rotation into cyclical growth, broken down tech, financials, et al – which would be a more bullish scenario as the leaders of the last few weeks are extremely overbought and we need a new group to take the baton.
Everyone is celebrating “strong” manufacturing data across the globe but it was relatively putrid ex US. China’s state sponsored report showed flatline (versus the private sector report late last week that showed contraction) – that is not exactly ‘strength’, and Europe stunk. But as always it is versus expectations and expectations were even lower than I imagined. It is a stretch to be buying “global re-acceleration” plays on these type of numbers.
This is one of those days you look at the general indexes and shake your head.
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Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
