One of my favorites from Rage Against the Machine. Today was a day for the bulls. We opened higher today on better than expected new unemployment claims which came in below 400,000. This was the spark that was needed to get the bulls stampeding. I've said it before, it will take some good fundamental economic data to turn around this market and we got some today. Steady buying throughout the day drove markets up over 400 pts although we finished off the highs of the day. This was the fourth straight day of 400+ market movements which I heard had never been done before in the history of the stock market!! It's been just an amazing week to behold. I followed the market closely in 2008 as well and this market is remarkably similar although back then we were moving 1000 pts a day and not 400.
I didn't do anything today in my own portfolio although I was tempted to buy some as I believe we can rally some more after today positive action. Interestingly enough was AAPL's relative underperformance to the benchmark. Markets were up 4-5% today but AAPL was up only 3%. I believe this is due to the fact that it had been outperforming the overall market to this point and had been somewhat of a defensive play for people looking to deploy cash. It had been down some 10+ % over the past few weeks but the overall market was down 15-20%. This underperformance is something to monitor over the next few weeks as I would expect AAPL to outperform in any rally. If you are looking for some bang for your buck and expect the markets to keep rallying, look at the most beaten down sectors and stocks such as small caps, EMs and energy plays. I like XLE, CAT, EEM, MOO or IWM and of course AAPL for those looking to play a rally. Me, I am going to follow my plan with AAPL to buy more when it goes up 5-7% but am not looking to add to any other positions at this time. I will wait until things calm down a bit and not when the market is moving 4-5% a day.
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