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Morning Commentary

ECONOMY & CARING GOVERNMENT ON THE BALLOT

By Charles Payne, CEO & Principal Analyst
11/8/2022 9:34 AM

The word of the moment is Gingerly:

adverb

In a careful or cautious manner.

"Jackson sat down very gingerly."

adjective

Showing great care or caution.

"With strangers the preliminaries are taken at a gingerly pace."

Gingerly is the best way to describe the market in the last couple of sessions. Stocks are higher, market breadth is impressive, but volume is extremely light. 

There are still more 52-week lows than 52-week highs. But it’s just watching the tape move with a  deliberate caution of someone leaving the hospital with a cast on their leg from a slip and fall. This great care or caution comes from a year of stock and bond market shellacking.

We are all shell-shocked, yet this is the exact moment we need to be aware of how the market is acting.  I suspect a year-end rally begins very subtly. And then it builds up momentum as more folks believe, and perhaps some things go their way like a favorable read on inflation or jobs report not goosed by 455,000 people to adjust for birth and death discrepancies.

Market Breadth

NYSE

NASDAQ

Advancers

2,007

2,549

Decliners

1,155

2,088

New Highs

79

101

New Lows

145

272

Up Volume

2.56 billion

2.57 billion

Down Volume

1.77 billion

1.83 billion

Heat Map

Communication Services (XLC), led by Meta (META) sprinted ahead of the other sectors in the S&P 500, followed closely by Energy (XLE) and Technology (XLK).

XLE is the new momentum darling as the sector moves higher even on days when crude oil moves lower. The action underscores the fact that bottom fishers are circulating among names that made them a fortune for a long time, even as Wall Street says it’s time to move on to new leadership.

Utilities (XLU) being down the most also points to a shift in posture from defensive to offensive.

The Midterms

Look at the history. There is a good chance that last Wednesday’s session could be the low of 2022 (see arrow). We’ll see, but I think we’ll have a divided government that stops free money policies from stoking inflation that has crushed so many people.

This week, there is a lot of data, including inflation data from the Consumer Price Index (CPI) and the University Michigan Sentiment report.

Blood Moon

The second total lunar eclipse of 2022 will turn the moon a reddish-copper color for 85 minutes on Nov. 8, 2022, though what you'll see during this safe naked-eye event will depend on your location on the planet.

Often colloquially called a Blood Moon, a total lunar eclipse, happens as the full moon (in this case November's full Beaver Moon) moves into the deep umbral shadow of the Earth and receives only light first filtered by Earth's atmosphere, will be visible from North America and parts of South America, Asia, Australia, and New Zealand.

A partial lunar eclipse will be visible from Iceland, parts of South America, south and central Asia and Russia. A penumbral lunar eclipse — when the moon is in the lighter penumbral shadow from our planet — will be visible from eastern Brazil and Argentina, northern Scandinavia, and the Middle East.

You can watch the total lunar eclipse on Space.com for free, courtesy of several webcasts from observatories across the United States beginning at about 3 a.m. EST (0800 GMT).

ww.Space.com

There are so many ways to try and incorporate the Blood Moon into the commentary. But I think it’s just cool to appreciate it as an amazing phenomenon that it is and represents.

Portfolio Approach

We lowered Energy and added to Financials in our Hotline Model Portfolio. If you are not a current subscriber to our Premium Hotline Service, email Info@wstreet.com to join today. 

Today’s Session

Everyone’s on pins and needles, as this midterm will have monumental consequences in additional to seasonality trends. The spigots must be turned off, including the SPR and more ‘free money’ from the White House.

The market is in no-man’s land but trying to create an upward trend from that double bottom. 


Comments
In one part of your communique you say Energy has been and is the darling, but then you drop an energy stock to add Financial. Donít understand the contradiction, and donít understand why we havenít been in the profitable emery stocks previously. Made $6000 in 3 energy stocks in last week.

Susan Hammer on 11/8/2022 11:48:32 AM
You kind†of†answered it: 'energy had been the darling.' - I think it's getting too crowded, I'm worried WTI hasn't broken out and I think a deep recession can hurt it.† Big gains in a† short period of time is how I'm trying to offset paper losses in an unsure market still in a strong downtrend. Oil is a darling but a lot of late bandwagon jumpers do not give me great comfort.† That said we can get back in and we still have some exposure. but we are also trying to get in front of the crowds elsewhere.† Note: today the only sector that is lower is energy.†

Charles Payne on 11/8/2022 11:54:40 AM
 

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