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Afternoon Note

Backing and Filling

By Charles Payne, CEO & Principal Analyst
1/7/2019 1:25 PM
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The market has done a lot of backing and filling today after a 4.0% Santa Claus rally underscored there are buyers out there.  In fact, Citi is saying buy the dip now.

The question for 2019 is what will lead the way?

Consumer Discretionary is by far the biggest S&P sector winner, led by Mattel (MAT), which debuted a new line of dolls based on a hot Korean boy band.  At least that’s what the headlines say, but this stock popped periodically last year on takeover rumors.

Not sure that happens or not, but its clear buyers are flocking to much oversold names that lost their way guessing the worst is over.  General Electric (GE) appears to be the name getting the biggest bets on a big bounce.

Another reason Consumer Discretionary is rocking this morning is the bounce in Amazon (AMZN), which caught an upgrade to Buy at Pivotal Research.

https://www.tradingview.com/x/NLcfaRVf/

The upgrade dovetails the upgrades last week on other momentum darlings:

Another potential leadership group could be value names that outperformed significantly last year.  Check out the total return these household names delivered last year.  While so many investors were chasing the hot new tech name, including several failed IPO’s, companies in business more than 100 years were still lining shareholder’s pockets.

Company

Stock Symbol

Year

Established

2018

Total Return

Eli Lilly (LLY)

1876

40.4%

Merck (MRK)

1891

40.0%

Church & Dwight (CHD)

1846

33.2%

Macy’s (M)

1858

23.7%

Hormel (HRL)

1891

19.7%

McCormick (MKC)

1889

39.0%

Pfizer (PFE)

1849

25.3%

I think 2019 will see more balanced leadership in a market that will otherwise remain very selective.

Technical View

Major indices sold off so dramatically, there is plenty of room to the upside before testing key technical hurdles.  For the Dow Jones Industrial Average, the key resistance point is 24,423 held on several pullbacks until it couldn’t hold anymore, which triggered the market to shift into freefall.   It just so happens that it is also the 50-day moving average, making it all that more important.

Dow Jones Industrial Average


Comments
Little confused on you 2019 Total Return column. Is that your projection for 2019 performance?

Stan on 1/7/2019 2:01:51 PM
We corrected it. Sorry for the confusion

Daliah Amar on 1/7/2019 3:00:16 PM
Thanks for correcting Daliah. Happy New Year.

Kevin Loving on 1/7/2019 3:55:16 PM
And a very Happy New Year to you.

Daliah Amar on 1/7/2019 7:58:45 PM
Charles, Please tell President Trump NOT to give Schumer &Pelosi ANY AIRTIME AFTER HIS ADDRESS TO NATION. The mainstream media ALREADY REPORTS EVERYTHING FROM SCHUMER & PELOSI & DEMS 24/7 !! SERIOUSLY when has any president, especially a Republican, ever received EQUAL or even Facts based non biased coverage on mainstream media & especially at on a REPUBLICAN PRESIDENTIAL ADDRESS TO THE NATION. NEVER had to give EQUAL time to the propaganda SOCIALISM democratic party, its Ridiculous that the DEMS are try to pull this political agenda SCAM. PLEASE CHARLES PAYNE &FBN TELL PRESIDENT TRUMP NO TO DEMS ON AIRTIME, THEY WILL BE GIVEN 24/7 FREE AIRTIME, AND REPEATEDLY AT WILL ALL THEIR FAKE NEWS TALKING POINTS. Thank you
Charles PAYNE ,& FBN. THANK YOU PRESIDENT TRUMP FINALLY A PRESIDENTIAL ADDRESS TO GET THE FACTS OUT TO THE UNINFORMED USA CITIZENS, & ALL THE PEOPLE BLINDED BY OPINION PROPAGANDA PROGRAMS ON MAINSTREAM MEDIA, &FAKE NEWS. HAPPY NEW YEARS CHARLES PAYNE, FBN, & BULL MARKET CONTINUES 2019.

Ed on 1/8/2019 1:22:02 AM
Thank you Charles PAYNE. Happy new year to you. Please Charles PAYNE tell president Trump DO NOT GIVE SCHUMER &PELOSI ANY AIRTIME AFTER HIS PRESIDENTIAL ADDRESS. THE DEMS GET 24/7 FREE PROPAGANDA REPORTED BY THE MAINSTREAM MEDIA, REPEATEDLY WITH ALL THEIR OPINIONS NOT FACTS. WE THANK YOU CHARLES PAYNE & FBN FOR REPORTING FACTS BASED NEWS. THANK YOU PRESIDENT TRUMP. BULL MARKET CONTINUES 2019. FINALLY PRESIDENT TRUMP CAN GET THE FACTS OUT TU O THE USA CITIZENS, &ALL THE PEOPLE WHO ARE MISLEAD, BY DEMS propaganda NETWORK news media.

Ed on 1/8/2019 1:27:59 AM
 

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