Wall Street Strategies
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Morning Commentary

MORE THAN MARKING TIME

By Charles Payne, CEO & Principal Analyst
11/7/2019 9:33 AM

On Wednesday, although most of the major equity indices finished lower with the S&P eking out a small gain, the session saw many more declining issues than winning issues. I bring this up because the notion of the “market” being up or down is so misleading when it’s reported in the news. The Dow Jones Industrial Average could be higher with the majority of its 30 components down on the session and visa-versa.

Your aim as an investor is to create your own market.

Build and manage a portfolio where you are in control, and the names are selected based on the ability to deliver stronger returns. Even when the object is a yield, you have the power to own stocks where big dividends aren’t erased by big hits to the principal.

This is one reason I like to share the market breadth with subscribers, which is a better look at the true nature of the session. Yesterday, the market breadth wasn’t great. However, against the notion of market consolidation and more media hysteria on the Chinese trade front, I think investors showed they want to be in the mix for the next leg higher.

NYSE

NASDAQ

Advancers 1,332

Advancers 1,137

Decliners 1,623

Decliners 2,004

New Highs 106

New Highs 92

New Lows 33

New Lows 76

Up Volume 1.71 billion

Up Volume 1.05 billion

Down Volume 2.80 billion

Down Volume 1.33 billion

Let Me Emphasize

It looks as if the market is spinning its wheels, but the current action is classic consolidation of gains, allowing weaker hands to sell while holding above previous key resistance points. It looks boring; perhaps foreboding to some, but this is good stuff. Pay attention to the market- it is telling us where to be for the next big move higher.

Charles V. Payne

Portfolio Approach

I continue to see the best value opportunities in the Industrial sector. We added two more fresh names to the model portfolio, as my favorite open ideas in the model portfolio are up too much for new subscribers to be on the same page as subscribers that might have much lower entry prices.

On that note, when you are buying a stock that’s up a lot for the session but down a lot for the year, you are NOT chasing fundamentals. There are times when you might consider buying a stock that is in the highs but only under the notion you are chasing fundamentals.  

Today’s Session

Initial jobless claims for the week of November 2 declined by 8,000 to 211,000 and near 50-year lows. 


Comments
Charles when you mention best value in industrials are you also looking at defense sector or just the non defense side of industrial because defense makes up about 30% of XLI . If you are in for defense why not just ITA or PPA ??

James Cuff on 11/7/2019 11:43:55 AM
actually I like exposure to defense contractors but they aren't cheap - focus more on the non-defense side.

Charles Payne on 11/7/2019 11:49:02 AM
Read your book. Love your story. Been receiving your daily newsletter for years and ready to go. Can you share with us how you initially started with when you first invested in the markets?

Ron Layton on 11/7/2019 12:25:43 PM
Thanks so much Ron It's a very long story but began in 1974 when I became interested and 1976 when I told my mom I would work on Wall Street.  After the Air Force I got a job at EF Hutton on the analytical side but didn;t make enough money so I went to work as a broker for a boutique firm but didn't like the system (thought unfair to individual investors). So I started this business about 30 years ago.  CP

Charles Payne on 11/7/2019 1:01:21 PM
Read your book. Love your story. Been receiving your daily newsletter for years and ready to go. Can you share with us how you initially started with when you first invested in the markets?

Ron Layton on 11/7/2019 12:26:02 PM
i absolutely loved your book ,it moved me to use your service. But i must admit it’s hard. the jargon is difficult for me. Keep It Simple for us slower guys! Give me a position and tell me why you’ve chosen it.

larry fagan on 11/7/2019 9:30:25 PM
 

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