The Turks shoot down a Russian plane. The consumer confidence gauge is plummeting. Brussels is still on lockdown with an expectation of an imminent attack. We've got a travel advisory for a heightened terrorist alert. The Fed's prepped and ready for its first rate increase in years.
And what do we do?
When you see days like this, days where the odds are stacked against pretty much anything positive, and you see a big turn, especially in the face of heavy declines in Europe, you have to recognize that sentiment's not working as a barometer of stocks. Right now, this market is saying it wants to go higher and it is yelling that over a cacophony of negativity the likes of which we haven't seen in ages.
What's working? Let's tick them down. First, oil, which is perennially supposed to go to $30. Isn't that what we keep hearing? It's had another good day, another day where it rises further from its $40 grave, the one from which it is supposed to plummet if it plunges through that floor.
That gain to a couple of bucks north of $40 is inspiring one of the great oil rallies of the year with Schlumberger (SLB - Get Report) , ExxonMobil (XOM - Get Report) and Chevron (CVX - Get Report) leading the way, the latter being two standouts in the Dow Jones Averages.
This oil and gas group, which has been written off for ages, just doesn't want to quit. That's an obvious sign that the big institutions are afraid, afraid they don't own enough oil stocks. They fear a lack of exposure. When a Russian plane goes down next to Turkey, it's reasonable to believe that the Mideast could blow up any minute and when the Mideast blows up oil goes higher. That's necessary because, incredibly, the glut in oil in this country just keeps building.
The fabled $30 price target from Goldman Sachs looms large when we get to the high $40s. However, until we bounce that high the short squeeze we are seeing keeps playing out. As we have said time and again, oil down at $40 has too many shorts. Oil up at $48 has too many longs. But it's a bouncing ball that pings from $48 to $40 and right back at ya. Except, the stocks stopped pinging. On the down crude days oil doesn't fall much at all and when crude fires up, the oil stocks roar with it.
How about restaurants and retail? With consumer confidence down, you'd expect that both of these would be down with them. The opposite seems to be happening, with the bricks-and-mortar stocks rallying right into Black Friday.
Nordstrom (JWN - Get Report) has joined Home Depot (HD - Get Report) and Lowe's (LOW - Get Report) , enjoying lift off. Today, Dollar Tree (DLTR - Get Report) and Tiffany (TIF - Get Report) joined them. Tiffany and Dollar Tree, two trees definitely not of the same pod, except when it comes to stock trading. Both companies missed the estimates. Both stocks got hammered at the opening. And then both stocks brought in buyers as the stories for the highest and lowest end retailers soared. Is the worst over? Sure seems like it.
Oddly, it feels the same way for Chipotle (CMG - Get Report) , a stock that has jumped from $536 to $569 since the spread of Chipotle-related E.coli to six states worth of restaurants. This one definitively feels like a short squeeze but not if it is contained, that's for certain. Panera's (PNRA) suddenly in a no quit mode after being in a no eat mode for ages. That one had been going up on the backs of Chipotle's woes. I can't even figure out why it could go up now. That said, it's cheap and my charitable trust owns it.
Then there's food business. This morning, Campbell's Soup (CPB - Get Report) reported a so-so number but talked a good game about taking out costs and the market loved it! Then Hormel (HRL - Get Report) , the rocket ship in the group, blew the numbers away with an amazing performance both from its legacy foods and from Cramer-fave Applegate Farms, my guiltiest pleasure being their bacon on a scrambled egg sandwich after a vicious night on the town. Someone on Twitter this morning said something to the effect of "I guess Cramer's going to tell us to buy Hormel again," as if I am not being harassed for recommending the best winner in a fabulous group. Call me guilty. I love recommending stocks that go higher.
How about the semis? People had given up on Analog Devices (ADI - Get Report) as some sort of tired old chip company, until it burned the numbers, just crushed them, sending the stock roaring. But not as much as the most bedraggled semi group, the ones that go into cellphones. At last Growth Seeker holding Skyworks Solutions (SWKS - Get Report) , Avago Technologies (AVGO - Get Report) , Qorvo (QRVO - Get Report) -- a Trifecta Stock -- and NXP Semiconductors (NXPI - Get Report) got their mojo back. These companies, all linked with Apple (AAPL - Get Report) , which also went higher, had been absent for the whole run of FANG -- Facebook (FB - Get Report) , Amazon (AMZN - Get Report) , Netflix (NFLX - Get Report) and Google, now Alphabet (GOOGL - Get Report) . They had become pariahs of tech land. Not after today. The bear spell seems to be broken now that they have gotten about as cheap are you are going to see them trade. (Apple, Facebook and Alphabet are holdings in Action Alerts PLUS, my charitable trust)
Speaking of a group that's been dying on the vine, how about the cybersecurity stocks? Last night, Palo Alto Networks (PANW - Get Report) put up some numbers that show the spending for this most important of issues is growing heavier not lighter, it's just that the money's going to the more full-service companies like Palo Alto and less to the episodic companies like FireEye (FEYE - Get Report) .
Or how about the Pfizer (PFE - Get Report) -Allergan (AGN - Get Report) deal? Yesterday, we had to hear from everyone and his brother both on and off line about what a crummy deal this was for Allergan shareholders. As usual I took the brunt of it by actually telling you to buy it down ten, saying that it simply isn't as bad as it seems. I tried going to Twitter last night during the Pats/Bills game and I was trending, trending for ridicule for suggesting that CEO Brent Saunders knew what he was doing when he sold Allergan for 11.3 shares of Pfizer for every one of Allergan. You would have thought that I had allowed Tampa Bay to walk all over the Eagles at the same time I was endorsing the purchase of Allergan. Yep, all my fault. Well, I don't know about the Eagles on their upcoming Thanksgiving game but today I feel pretty good about the run in Allergan.
Of course some things do make sense. The defense stocks roared again, because countries are lined up for the wares of Lockheed Martin (LMT - Get Report) , Northrop Grumman (NOC) and General Dynamics (GD - Get Report) . The travel stocks did get hurt by the travel advisory and the rallying oil prices, with American Airlines (AAL) , Delta (DAL - Get Report) and Spirit (SAVE - Get Report) really getting hammered.
Yet today was clearly a day where we should have been crushed the way they were in Europe. Yet it didn't happen. I know in traditional journalism it's not a story when something was supposed to happen and doesn't. However, when it comes to the stock market, if you don't get a decline when you should, it's a statement, a statement saying if this is what happens when things are bad, I can only imagine what would happen if we actually get some good news.