11/17/2025
By Charles Payne, CEO & Principal Analyst

Overbought and Overdue

 The major indices have made impressive moves this year, putting them slightly over their skies, but the move since the April 8th low has been monotonic, suggesting pullbacks are long overdue. The NASDAQ was +50% from the April 8^th low, so it was no surprise it took the hardest hit last week.

So, the stage was set after a rocky couple of weeks.

TS Lombard posted a chart showing that the S&P 500 (SPX) has averaged annual gains of 6.9%, with dividends reinvested over the past 154 years. On that basis, the S&P was about 10% overvalued.

Modern Day Capitulation?

Coming into Friday, I doubted the market could swing back ahead of the weekend, even though I was excited about buying the dip and getting repositioned ahead of Nvidia (NVDA) earnings next week.

After all, we still hadn’t seen classic capitulation, but perhaps we should measure it by volume instead of percentage decline. Historically, a significant decrease in volume has been a buy signal.

Charles Payne
Wall Street Strategies

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