Are there really Bears who don‘t like honey?. Well, it seems the ones in the stocks market these days just don’t, even when it’s handed to them on a plate overnight at SPX ES 1030. Yes.. that's about 20 points from lows to highs the Bears got teased and than dragged by an underlying bid of swarming Bees!. What had the makings of a 1+% down day due to world markets feeling the US-China trade wars, turned out to be just a regular ordinary day in this Bull rally.....Bears not pressuring new positions….Bulls coming in with an underlying bid..new cycle high being made. The Bears just can`t conquer their fear of upside risks and really who could blame them after the 2 recent slides that ended up disappearing by short covering with new highs being made both times. Today`s upside risk is not really the Retail report, this report tomorrow has been a time shorts position themselves prior to this summer, which led to sell offs on day of.
In our view, today`s upside risk is something you probably didn't hear much about in the media. It is the Barclay`s conference tomorrow/ Wednesday, where banks will start updating the markets on Q3!. We discussed the positive tone coming out of the conferences last week, notably the Tech`s sending a positive tone that helped the market make new highs. Well, this week, this financial conference is fear for Bears!. We all remember what the Bank- Broker tone did for the market to start this rally!. Simply, the shorts were reluctant and covered in case things are upbeat leading to SP financials ending up 1.4% on the day. Early in the summer, we said eventually after this initial rally, we anticipate the Banks- Brokers to lead the market higher in Q3-4. Is this the beginning of this or are they going to be the reason we pullback and correct. Simply, this conference is important to the Bull cause and we'll monitor closely…(sell off on good tone or will market run higher?). Still, there is other data points to watch for, inc retail sales and earning from some notable names this week.
As far as individual earnings linked stocks, we had a few more hovering around and/ or making new highs like SWI, which has had consecutive up days. FIRE alerted again last week is capable of duplicating such a move. UTA continues to find a bid, but after being alerted in $9.30`s recently, a run to 12.60 is not a bad excuse to take some profits as it just clears 50ma (even though today it had its best bid day). A stock like this is one we'd be buying prior to its next earnings report due to its China and business factor. VVUS, showed it's capable of moving fast on any given day, we have no hesitation holding it long term as we originally said.