Monday’s session was like the Clint Eastwood classic The Good, the Bad and the Ugly. There was some stuff to like, but there was a lot to be concerned about as well.

The Good

Those key support points held again by the time the closing bell rang. It was another remarkable rebound for the broad market. The market has put up a heck of a fight at what is seen as a cliff into a possible abyss. There is a lot to be said for the market holding at key support points and climbing off massive losses, but we are still beginning a new session on that same cliff.

The Bad

Key sectors continue to flash red, adding to concerns about the overall economy.  

Financials

Financials are problematic. While the smartest guys in the room, those big money center bank folks are paying the price for focusing too much on trading, and not enough on banking, weaknesses are permeating through the sector.

• Money Center Banks: All seven were lower, with Wells Fargo (WFC), the biggest loser -2.9%
• Regional Banks: All four were lower, with KeyCorp, the biggest loser -4.4%
• Life Insurance: All six names got hit, with Principal Financial Group (PFG), the biggest loser -3.31%

Energy

Energy continues to be a drag as crude oil continues to plunge.  It’s hard to believe this is only about excess supply, and the inability of the Organization of the Petroleum Exporting Countries (OPEC) to get their act together. 

• Oil & Gas Equipment: Saw six of six names lower, the biggest loser Schlumberger Limited, (SLB) -2.49%
• Independents: Saw eleven of thirteen names lower, with several absolutely crushed, including Apache Corporation (APA) -6.3%
• Refiners: All four companies saw their stocks close lower, with Valero Energy Corporation (VLO) the biggest loser -3.4%
• Majors: both Exxon Mobil (XOM) and Chevron Corporation (CVX) were lower on the session

FedEx (FDX) and United Parcel Service (UPS), which should be riding the internet delivery wave, instead led Transportation names lower after a downgrade of the former on company-specific concerns.

The Ugly

It was a great-looking rebound as the market showed a lot of moxie climbing off the canvas for a 600-point reversal before all the major indices faded but closed in positive territory. The big problem, however, was looking under the hood as there was a lot of carnage. 

Only 27 stocks, none of which you have ever heard of, reached new 52-week highs during the session, against 1078 hitting new lows, including names in your direct portfolio or funds in your 401K.

Milestones	NASDAQ	NYSE
52-week highs	15	12
52-week lows	517	561

Summation

Even if the market stages a rebound here, the initial stage of such a bounce will be in momentum names that are able to attract individual investors and professional investor funds. So many of the same names that triggered the sell-off have to lead the bounce, but that still means there are a lot of great stocks treading water and changing hands at very deep discounts.

Current WSS Portfolio Approach Portfolio Distribution

We added a defense contractor yesterday. The group began to make a big move on reports of defense spending in the next White House bill. The price has been right for some time, but the action triggered urgency. 

Communication Services	Consumer Discretionary	Consumer Staples	Energy	Financials	Health Care
2	2	1	1	1	1
Industrials	Materials	Real Estate	Technology	Utilities	Cash
3	4	0	1	0	4

Comments

Charles, we asked you yesterday if China would grab top apple executives in China, instead they gave QUALCOMM a big fat kiss, to punish apple, even Huawei running adds to throw out apple products and buy Huawei products for a discount price. So China can REALLY SPY ON YOU . BUT TODAY CHINA JUST GRABBED A CANADIAN CITIZEN WORKING ON A THINKTANK. IT'S an escalation that could lead to CYBER WARFARE ATTACKS. CHARLES Please investigate report on talk about this on your show . Your THOUGHTS on this? Will USA warn CITIZENS of China grabbing business persons in China, or tourists? Or is it a forced hand on weak eyebrow glue Trudeau , to Not extradite the Huawei spy to USA. MOTOROLA had a Chinese spy caught stealing IP &R&D at the airport with a thumb drive full of stolen IP, the person worked for Motorola was a Chinese military SPYING as a worker ,that was deeply involved in colleges recruiting and getting new Intel to China. MOTOROLA was smart, pulled out of China, and does NOT use ANY China MANUFACTURING technology. MOTOROLA has been doing excellent reviews great and is still growing &R&D without China market. So food for thought wallstreet!!?? Ed on 12/11/2018 10:19:42 AM

Down to 15% from 40%, WOW... The economy is sure showing a lot of resilience... It seems to be having a bumpy ride as it goes through some rough patches, but it looks like it is not giving up the fight and still wants to win, truly positive... Seems more psychological than technical... In spite of the issues with social security, immigration, anti-Trump psychosis, it is still being able to peep its head out from the underbrush and catch some air... Andrew B Newallo on 12/11/2018 11:55:52 AM

LOVE The Good, The Bad & the Ugly. How about writing up The Dirty Dozen and Payne's Heroes? Mary, 1 conservative in CA on 12/11/2018 1:52:36 PM

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