I figured many were leaning the wrong way. Possibly not many saw this coming. Even most of the honest bulls will admit they are stunned by the magnitude of the gains today. The fact that we didn't even dip and were hitting new highs for the day in the last hour of trading is proof that there was very poor positioning and massive scrambling to try to get in tune with this strength; along with the machines humming, of course.
Some might argue that window dressing helped to accentuate the upside action, but, in retrospect, the idea of a 'sell the news' reaction to European news on Tuesday may have been a bit too obvious. What really surprised the market was that no one expected the Greek bailout news to hit overnight. It looked like the endless debt negotiations were set to continue for a few more weeks when trading ended Wednesday. Expectations had already declined just when the news hit this morning and that lit the fire.
Obviously at this point, the market may be extended, and possibly be in need of some consolidation, but that has been the situation for a while now. The dilemma is that the more one-sided the action has been, the bigger supply of folks who are missing out and will act as underlying support. Markets this strong produce legions of potential dip buyers.
The folks who are underinvested at this point are hoping and praying for pullbacks and many of them will jump in on the most minor pullbacks. There is a tremendous amount of anxiety about underperformance now and no shortage of folks who are underperforming.