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End Of Month Melt-Up

The S&P 500 has hit a 3-month high; shorts are looking to cover as the month closes out.

As I've said before, it wasn't supposed to be this way; many big names-including big quant funds-were positioned short going into earnings season, under the assumption we would sell into the rallies in March and the first half of April.

That hasn't happened, and now some big names are way behind the market advances. Some are clearly panicking and covering their shorts.

The S&P 500 is up 9 percent in April, it's best month since March 2000. But traders tell me that many big quant funds are DOWN this month.

Traders are ignoring the bad news and concentrating on hopes of an economic bottom. As a result, high-beta names-tech, materials, financials, consumer discretionary-are again outperforming the defensive names like healthcare and consumer staples.

Sectors this month

  • Financials up 21.7 percent
  • Consumer Disc. up 17.2 percent
  • Industrials up 16.7 percent
  • Tech up 11.6 percent
  • Materials up 11.5 percent
  • Consumer staples up 2.9 percent
  • Healthcare down 1.0 percent

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