Bed Bath & Beyond (BBBY) has been a rational chart in a market where almost everything else has been the student body left environment for ages (guess the direction of the market and 90% of the stocks move that way each day)
While I believe the consumer is cooked, and almost all consumer discretionary stocks are massively overstated to the upside as fund managers buy the playbook (buy consumer discretionary as its early cycle recovery), I am going to take my wins where I can find them. We have not had more than 2 down days in a row in this entire 2+ month run. So tomorrow we could be back to a +2% day...
Bed Bath & Beyond filled its gap perfectly around $27.70 and that was our goal so I am walking away with a hard fought 10% gain. When people are not being squeezed each morning, it is nice to see good old technical analysis work like it used to. There are a plethora of consumer discretionary stocks at almost double the value of BBBY but they continue to run up day after day as shorts get squeezed out. When the market indeed learns to fall for more than 2 days in a row many of these charts have zero support in them as parabolic moves don't lend to slow drops, but as always if you are a day or two early you can get chopped to pieces. Reading charts has been quite useless in the groups the shorts were betting against due to fundamental reasons... once all the underbrush of bears has been cleared out it will be interesting to see who will continue to pile into said stocks at 30, 40, 50x forward earnings - go Whole Foods Market (WFMI)!
As an aside congrats to Capital One Financial (COF) which just dumped shares on the public at the highest price the stock has traded since the beginning of 2009. You can almost here the high 5s happening in Washington D.C. ... as they say mission accomplished