Positive Signs for Those Who Care to Look

When stocks run ahead of earnings as Caterpillar (CAT - commentary - Trade Now) is doing, you have the potential for the ultimate short squeeze. If the company prints a good number tomorrow, the stock will just keep running and running and running. Isn't that the reason why both RBC and Bank of America told you to buy it ahead of the quarter?

And if CAT reports a bad number? Then management will most likely say things are going to get better, and it could go down a bit and then start running again. Or the analysts will say it.

CAT is like a bunch of companies, including Joy Global (JOYG - commentary - Trade Now) and Eaton (ETN - commentary - Trade Now) and United Technologies (UTX - commentary - Trade Now), that give people exposure to the obvious turning in the world's economy -- obvious to everyone except just about everyone on this site. The strength in Eaton alone shows you how much the market will embrace anything positive here. The reaction to a simple upgrade of Joy Global by RBS shows you the intensity of the animal spirits.

In fact, the people who are negative on this site are now chatting up the notion of a rate hike, and that's just totally ridiculous, given that most of the bears are worried about a recession, not inflation, although bears can contort all they want, I guess.

We are in a moment of unbelievable bullishness, and it is lost on just about everyone here, and, at times, it shocks me. Just shocks me. The ability to find a negative spin on anything and everything mystifies me to no end.

You do not see these kinds of rallies in bear markets, or at least the bear markets that people adumbrate here every day.

In a bear market, people bet negatively, and it pays off. In a bull market, people bet positively, and it pays off. Each side makes itself right, depending upon the market.

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