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Morning Commentary

ON THE WATERFRONT †

By Charles Payne, CEO & Principal Analyst
5/13/2022 9:45 AM

I coulda’ had class. I coulda’ been a contender! But instead, I got a one-way ticket to Palookaville.

It’s the most overused term in sports, but I would have used the word “Gutsy” a few times if I were calling the market like a play-by-play announcer yesterday. Instead, after an epic seesaw session, all the major indices climbed off the canvas into the closing bell.

Make no mistake; this market is still stuck in Palookaville, but it’s not a one-way destination. There will be sessions that sees more swoons, but there will also be the kind of market rips that make you think you can be the champ again.

Gutsy

High

Low

Close

Change

S&P 500

3,964

3,858

3,930

-0.13%

NASDAQ Comp

11,547

11,108

11,370

+0.06%

Russell 2000

1,752

1,701

1,739

+1.24%

Ringing the Bell

They say a bell doesn’t ring at the top or bottom, but undoubtedly, when we are talking about the market getting crushed, the devastation rings our bell. So, perhaps it happened yesterday when the Fear & Greed Index lurched to a reading of “6”, which is within spitting distance of the direst fear reading.

Individual investor bullishness declined again and remains substantially below historical levels. But I like what’s happening with bearishness, which is receding slowly. This survey is considered a contrarian indicator. The lower the bull reads, the better, but I like that bearishness is also easing.

Speaking of extreme – there were only 15 stocks out of 1,800 that closed at new 52-week highs.

Market Breadth

NYSE

NASDAQ

Advancers

1,714

2,667

Decliners

1,679

2,226

New Highs

4

11

New Lows

1,044

1,714

Up Volume

3.71 billion

4.44 billion

Down Volume

2.68 billion

2.27 billion

S&P 500

The S&P is still well below key resistance numbers that would begin to trigger a sense of urgency – but don’t underestimate how fast this might change.

NASDAQ-100

How wild was yesterday’s session?  Take a look at the intraday moves (courtesy of Bespoke Research):

The NASDAQ-100 (NDX) is in freefall – the perfect downtrend. There will be big bounces, and you want to trade them when you can.

TGIF…I think?

If you are reluctant about the market today – I do not blame you. The last five Fridays have been tough:

Portfolio Approach

There are no changes this morning.

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Today’s Session

Russell 2000 Moment of Truth

The Russell 2000 broke out in January 2013 at 865 and didn’t look back until it hit a brick wall on August 2018, at 1,740.  Upon clearing that same hurdle on November 9, 2020, it was off to the races again.  But now the Russell is getting slammed – landing at that once formidable resistance point, which is now a major downside test.

Question from subscriber:

Hi Charles. This market seems to be having trouble "finding the bottom". Would you agree that we're probably not there yet? My thoughts are that there's still too much uncertainty to find the "firm ground" needed to push higher.

My Reply

I do not know - but we can't get too fixated as long term investors, and even as active investors. We are close enough, and individual stocks are down so much, we can begin to nibble.  At the very least, honing those buy lists.


Comments
I agree. Hone your buy list every day. If you are able to, (cash on hand) pick your target price where you are comfortable owning long term and enter a DNC /DNR order. Then wait for your target price to be reached. Unless your job is to follow the market minute by minute??? Chances are you won't be at your terminal when execution happens. Then put on div. reinvest and monitor and hold for years and years. 10 Years from now, you'll look back and think you're a genius. Well, maybe not a genius....but if you buy quality??? You'll at least think you made a pretty good move.

Charles Haselberger on 5/13/2022 10:08:08 AM
Just for you Charles - right now, YTD my portfolio (700K+) is down 0.99% vs SP500 and Russell 2000 -15%+ & -20%+. Have followed you since your FIRST show. Owe a lot to you and your guestís. Thanks!

Tom Holcomb on 5/13/2022 12:42:36 PM
I'm a contenda'. We are all contenders, Charles. Good weekend to you.

Richard Koehler on 5/13/2022 3:59:54 PM
 

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