James Cramer view about this rally........
Many times, we follow this progression: We have a huge up day on Day One of a move, huge. The next day, we consolidate after a little decline, causing short-sellers to freak out and come in and buy on Day Three, which is also a big up day. (By my reckoning, we're on Day Three right now.) By Day Four (which will be Tuesday), we have analysts believing in the rally and upgrading a bunch of stocks, causing the stocks to go up even though they've already moved a great deal.
Day Five (Wednesday) sees a consolidation to a slight decline, featuring more hedge fund panic and talk that "It won't come in."
Day Six (Thursday), we get some bad news and start seeing rollover. By Day Seven, it's obvious that everyone overstayed their welcome and we get our heads slammed. The move ends.
We often get confused during these moves because we keep calling them "one-day wonders." In reality, the moves start with a one-day wonder and then don't roll over as they should because of shorts pressing their bets and hedge funds being underinvested, because that was correct going into the one-day wonder.
It is the days that follow the one-day wonder that are so painful to the bears, days like today, on which, frankly, the bears are saying to themselves "Hold it, people have been talking endlessly about the dividend thing and now, after all that talk, it matters? Give me a break!" These days cause intense pain. They get the hedge funds thinking, "Another day of this and I am going to capitulate."
Then they get that other day of this (Day Four, Thursday) and they capitulate.
And the move ends.
AI
