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Afternoon Note

Digging the Spunk

By Charles Payne, CEO & Principal Analyst
6/21/2022 1:29 PM

A nice session thus far with all sectors in the mix. But Energy is leading the way, as Wall Street loves this trade, even as they call for a sharp economic slowdown or recession.

There are inherent problems to be sure.

Mega cap growth acts great and two retail favorites are one and two on the top movers list.

Other intriguing niches

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I’m digging the spunk of this move. There have been a couple of times traders could have cashed in and moved back to the sidelines.

It will be interesting to see if the move can hold up and carry over into tomorrow’s session.

I know – don’t be greedy.

Existing Home Sales

Down for the fourth month in a row, existing home sales (May 2022) declined 3.4% month to month and 8.6% from a year ago, landing at the lowest pace in 23-months.

United States Existing Home Sales

Price and Supply

Prices climbed to a record $407,600.  For new buyers, the price increased, and higher mortgages have resulted in a 46% increase in monthly mortgage payments.

Interestingly, months’ supply edged up to 2.6 from 1.6 in January.


Something has to give, and I suspect prices are peaking. When the turn comes, it could be swiftly to the downside.

Who Knew?

Kellogg is the stock of the day after the 100-year-old company announced it will break up into three companies in an effort to unlock value.

The stock popped out the gate rallying as much as 11.9% from Friday’s close.  That means anyone that bought the name ahead of the weekend scored big time.  If you were a holder of way out of the money calls, including the 72.50 and 75.00 calls, it was a grand slam.  Here’s the thing, there was huge buying into the close on Friday, which is unusual ahead of a three-day weekend.  In fact, 4.3 million shares traded versus the daily average of 2.6 million.

These were strategic buyers with most loading up moments before the closing bell.

I don’t know who knew what, but I know I have seen these over and over again from more than three decades, and its stinks. It’s why I do not push back when someone tells me the market is rigged.  Big time investors that do size never get in trouble, however.  I’ve seen folks that work at printing companies or friends of a company accountant get in trouble for using insider knowledge. And even a rare hedge fund manager, but everyday big money is laid out ahead news on things like rating changes or acquisition.

I can’t legally say there were shenanigans ahead of Kellogg’s news.  Just $117 million in extra stock active in the stock hoping it would snap, crackle and pop.   It did.


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