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Morning Commentary


By Charles Payne, CEO & Principal Analyst
1/26/2023 9:35 AM

Wow - what a session!  I know it didn’t look like much on the surface, but that was one of the best sessions I’ve seen in a long time – the kind of day you must pay attention to. Dare I say the ‘animal spirits’ are coming back?

There were some remarkable intraday reversals led by those mega-cap names that Wall Street wrote off last year. It looks like they’re back. Amazon (AMZN) surged during the session; Microsoft (MSFT) climbed off the canvas, and Tesla (TSLA) finished higher ahead of posting its financials. In addition, Tesla posted solid numbers at the close and reiterated delivery guidance.

With only two hours of trading remaining in yesterday’s session, Financials (XLF) were the only sector higher; but at the close, there were eight.

Internals Heating Up

There were 110 net new highs to new lows on the day. All sixteen trading sessions of 2023 have seen more new highs than lows – the number was 20 for all last year. This is an extremely bullish signal. I’d like to see a steady progression with even larger net figures. t For now, the key has been the daily resolve.


Don’t look now, but 65% of the names in the S&P 500 are changing hands above their respective 200-day moving average. In this market, investors must focus on the names and sectors leading the charge.

Compelling Charts

The S&P 500 has held the trend line that was formerly resistance as support. Now, the big test is clearing 4,100.  Beyond there, I think the index could get to 4,300 – 4,440.

Wildcard: Here’s the problem with market resolve – Jay Powell. This is 100% the opposite of what he wants to see, but he has also wedded himself to being data-dependent. He is weeks from being able to take a victory bow, but I doubt he will go that far. On the other hand, the Bank of Canada paused yesterday, so there’s that cover if the Fed decides the smart thing to do is respect all their handiwork and the lag effect.

Portfolio Approach


We are adding back the stocks we suspended yesterday to our Current Buy list and adding a new position in Consumer Discretionary in the Hotline Model Portfolio. If you are not a current subscriber to our premium Hotline service, contact your account rep or email Info@wstreet.com to join today. 

Today’s Session

There is so much to unpack this morning, but the main story continues to be market momentum.  Big technical tests could see monster breakouts.

GDP beat, but the details are problematic (more in the note).  Headline 2.9% against consensus 2.6%.

Inventory rebuilding was the biggest contributor, and while the Consumer was the second largest at 2.1% growth, it was a major miss against consensus of 2.9% growth.  Meanwhile, Housing shows a massive decline taking 1.29% off the total.

Prices are down, and that’s great news for the Fed, which must feel very conflicted this morning.

Just let the market do what it wants to do. Lots of cash on the sidelines... Not saying the bulls are on parade, but swimming upstream on the river the Feds built

Bill Gratzl on 1/26/2023 6:54:49 PM

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