Third, money flowed out of stocks and into bonds until two minutes after the bottom in the biotechs. Fourth, that whole process reversed at the bottom in the Nasdaq and the S&P. Fifth, everything accelerated to the upside when the Twitter news broke.
Or in other words, the whole thing was dreadfully artificial and entirely done by a combination of "break the sellers" margin call and short-selling and HTF pressure, no doubt encouraged by the rally in the bond proxy TLT. Once the sellers were broken, the process was free to reverse.
Now we have no idea if the sellers are done. They tend to come in when the market lifts, as soon as they think there's enough cushion. Again, that's typical of the way margin clerks work. They want to try letting the bids build before they slice through them. But once the process starts, it doesn't stop until 1 p.m.
My conclusion: If you think for even one second that this selloff has been motivated by earnings shortfalls, think again. That's not just because all the major stocks that have reported, save JPMorgan Chase (JPM), have announced much-better-than-expected earnings.It's all artifice. That's why it is so darned hard to make a judgment as to whether the selling, at last, is complete. At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long GOOG and JPM. Editor's Note: This article was originally published at 8:02 a.m. EDT on Real Money on April 16.
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