You Didn’t Get Me Down, Ray

The 1981 movie Raging Bull, which chronicled the boxing career of Jake LaMotta, depicted the famed 1951 fight between LaMotta and Sugar Ray Robinson known as the St. Valentine’s Day Massacre. It was given that name because the fight took place on St. Valentine’s Day and because Sugar Ray beat LaMotta badly, scoring a Technical Knock Out in the later rounds.

The important word here is Technical. LaMotta was proud of his ability to take a punch and claimed to have never been knocked out in the ring. When the fight was over LaMotta was out on his feet, slumped against the ropes, but not “knocked out.”

In the movie LaMotta approached Sugar Ray in the ring after the bout and taunted him, “you didn’t get me down, Ray.”

We could say that yesterday about the NASDAQ. Bleeding nearly 1.5%, out on its feet and threatening to go lower it refused to do so late in the session and rallied tepidly into the close. Most importantly volume was reduced from the prior session thus limiting the damage.

With RIMM issuing less than stellar results after the bell the selling could well resume.

But many leading stocks are holding up rather well in their uptrends. To cite just a couple examples BIDU finished well off its lows on a burst of volume; AAPL, though selling off in above average volume and closing near its lows remains in a brief consolidation where it has rested after last week’s romp.

We do not argue for complacency. But if a well purchased stock has yielded you a 40 - 50% gain during the rally and there is nothing exceptional about its pullback it deserves the benefit of your doubt.

And for now so does this impressive, resilient rally.

(Check out our companion blog for some stocks we’re watching for possible purchase if conditions are favorable).