Well finally we got a glimpse of Santa Claus during the so-called Santa Rally.

Index	Session	2022
S&P 500	+1.6%	-19.2%
Nasdaq Composite	+2.6%	-33.0%
Dow Jones Industrial Average	+1.1%	-8.6%
Russell 2000	+2.57%	-21.3%

Interestingly, for the quarter, the Dow actually gained 15.65% and the S&P500 rose 7.4%. 

All eleven sectors finished the day higher.  Communication Service led the charge, but it is also the most beaten down sector, down over 40% this year.

Despite the strong session, the S&P 500 looks to finish the year below 50 and 200-day moving averages and clinging above support that must hold north of 3,750.

Heat Map

Finally, some (post) Christmas cheer as 91% of the names in the S&P 500 finished higher.

Last Shall be First is always a theme during bear market bounces, especially heading into January.  It’s the ultimate bottom fishing. Yesterday, the worst performers in 2022 enjoy monster rallies.                                            

I do not think I need to remind everyone how tough 2022 was, but sessions like yesterday underscore the kind of pent-up opportunity that becomes more sustainable. This should happen very soon, as the market is oversold in our opinion but still vulnerable.

You are going to hear a lot about earnings estimates needing to come down, which is fine.  But I think earnings will surprise big time on the upside and coupled with hints of Fed slowing (not to be confused with cutting rates and pausing quantitative tightening) its aggressive rate hiking agenda, the market should take off.

The most important thing to remember is this is a market of stocks, and the great ones have been punished just as much as the not-so-great stocks.  Therein is the huge chance to do very well.  

Portfolio Approach

There are no sector weighting changes this morning to our Hotline Model Portfolio.

We are coming back next week ready to turn it around.  I’m genuinely excited about making a lot of money, but not swinging for the fences – just sniffing out and owning those names that should rally strong in 2023.

We wish you a very happy and healthy New Year.  Enjoy the rest of the week/year.

Charles Payne

There will not be an afternoon note today.

 

 

 

 

Comments

A thanks to everyone in the organization for your support and educational insights over the past year. Looking forward to putting 2022 behind us and a better 2023 for all. Terry Dowler on 12/30/2022 9:49:31 AM

Happy Happy Happy New Year Charles !! Mark Keaton on 12/30/2022 10:10:47 AM

Happy New Year Charles to you and yours! A Quote from Dad Raul Paz " YOU'RE THE GREATEST, LIKE CASSIUS CLAY" Lourdes M Paz Kawaguchi on 12/31/2022 3:13:01 PM

Thanks for being the best of the best in 2022! Happy New William Hall on 1/2/2023 3:44:13 PM

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