More pain for shorts...stocks came off their lows at 10 a.m. ET as New Home Sales come in much stronger than expected, bucking every major housing report so far.
There has been a lot of pain because many traders had been set up to be short stocks and Treasuries this year. That trade has not worked out. Many traders face another year of underperformance for wrong bets.
- Guidance while weak was not horrible, so all those who have been short retailers have covered under the theory that the worst...for the time being...is already out.
- Traders are also looking for reasons to look past the weather in the earnings commentary, highlighting comments that business picked up in the past week (Macy's) or are reasonably solid in spite of weather (Home Depot). That has given investors reason to believe that the consumer will indeed rebound.
—By CNBC's Bob Pisani