Charles Payne's Market Commentary

Morning Commentary

Sell The Rip?

By Charles Payne, CEO & Principal Analyst
5/16/2022 9:44 AM

There are a lot of mixed messages from the market, although, the overall narrative of a weak market vulnerable to sharp selloffs remains firmly intact.

Wall Street continues to look to short rallies, as the overarching belief is that retail investors should pay a heavier price. Much of this is bluster and deflection from the awful performance of the street. Of course, the more stocks go down from here the greater the attraction. I find it remarkable there are suggestions for long term investors to sell stocks like Apple (AAPL) and Microsoft (MSFT) with the notion everyone will turn around and buy at the exact bottom.

I do not buy that true market investors managing big money are selling bounces – on the contrary, I’m sure they are building positions.

The devastation has been immense this year, and we are going to see the majority of these names higher in a year, but many are going to be much higher.

Glimmer of Hope?

Friday was a strong session, but a look at new highs and lows remains astonishing. Only 25 names posted new highs.

Market Breadth	NYSE	NASDAQ
Advancers	2,663	3,613
Decliners	695	1,248
New Highs	12	13
New Lows	202	316
Up Volume	4.71 billion	5.18 billion
Down Volume	416.29 million	647.64 million

The street is pulling back on the intensity of Fed rate action. N ow its 50 bps hikes not 75 bops.

Bad News = Good News

This morning, the Empire Manufacturing report was a huge miss: -11.6% consensus +15.0%. This is what the Fed wants to see.

Portfolio Approach

There are not sector weighting changes this morning in our Hotline Model Portfolio.

Today’s Session

Keep an eye on the VIX, which continues to drift below that 30 read. The street wants it to get above 40.

Comments

Charles, love your work and just received your book. Very much looking forward to reading it. Your comment on the small number of new highs has been something you've been saying for a while now. Isn't that a function of how far many stocks have fallen? If I've got it right a stock that has fallen 50% would have to rise 100% to reach it previous level. That being the case we could be in for a large number of up sessions with only a few new highs. In addition the high number of new lows would seem to only exaccerbate the issue. Thanks, Skip

Skip Ahneman on 5/16/2022 10:06:25 AM

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