Photo: jamidwyer on flickr
Some good thoughts from Mike O’Rourke of BTIG on the momentum in this market seen last week:Friday’s rally was more equine than bovine. In a rare media appearance, hedge fund manager David Tepper of Appaloosa provided a bullish outlook for Equities. After the summer of popular pessimism as highlighted by the NY Times last month, and themes like deflation going mainstream, such comments from someone with a track record suddenly makes optimism acceptable once again. The market received an added boost from a better than expected Durable Goods report with healthy upward revisions to the July report. The way we like to define bull and bear tapes is as follows. A bull tape is one where during selloffs, stocks don’t stay down long enough to afford the opportunity to buy and a bear tape is one in which stocks don’t stay up long enough in the rallies to afford the opportunity to sell. As we all know, the equity market has been consolidating, not only in the trading range of the past 4 months, but actually for an entire year. It has been positive that throughout September, down days have been scarce, but the quick and easy manner in which this week’s 3 day selloff was erased is a good indication that we are likely in the early stages of a bull tape.