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Hotline Sample Report

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12/26/2023 10:15:14 AM Eastern Time

By Charles Payne, CEO & Principal Analyst

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I hope everyone had a great Christmas. We are blessed in so many ways.

I get very annoyed when I see financial media making a big deal out of nebulous stuff, like the market being up two out of three days. It’s goofy stuff.

Still, the current eight-week rally streak is not only impressive but encouraging. Moreover, the 15% gain is the best among streaks of the same time length.

Active money managers were still underexposed, and a lot of hedge funds had massive short positions.  This kind of momentum is infectious and hard for professionals to ignore.

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Active money managers are chasing into the New Year.


Growth continues to lead at the expense of traditional defensive names.

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Small-caps continue to come up big – leading in each style category. Many of these names made monster gains in a short period.

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Heat Map

Look at all those small green boxes from last week. That’s how the market withstands declines in Apple (AAPL), Nvidia (NVDA), Meta Platforms (META), Amazon (AMZN), and Tesla (TSLA).

S&P 500 Map

The question now is: where is the low-hanging fruit?  Close to 90% of the stocks in the S&P 500 are changing hands above their 50-day moving average.

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Still No Breakout

The one thing that irks me is the S&P 500 still hasn’t broken out. It has too soon, or it pulls back to test 4,600, and if that doesn’t hold, it could trip down to fill the gap north of 4,400. I don’t think that will happen, but it’s a possibility.


Fear & Greed

I think the market could continue to surge into the further right-hand side of the extreme greed zone.


Portfolio Approach

We are adding a new position in Financials (ALL) in the Hotline Model Portfolio this morning.

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Today’s Session

It’s been a quiet morning, as many are taking the entire week off.  There is no major news or events scheduled, which means the market will trade more on impulse and current sentiment than normal.  In a way, this is good, because we can see if the natural forces behind the rally are still in place.  What makes up these tendencies is always up for debate, and while some action of late is panic buying, there isn’t irrational exuberance. 

Much of the excitement centers on the action in the bond market.  It’s being pointed out this morning that the ten-year bond yield is at the same level as it was at the start of 2023.  It’s sort of like the weather.  I read tomorrow it will be 54 degrees in the New York area and I’m thrilled it’s going to be such a mice mild December day. 

If the weather person forecasts 54 degrees on July 4th, I would fret that it’s going to be freezing.

The ten-year bond yield is still ‘high’ based on the average in recent years and the pullback from 5.0% doesn’t completely dismiss the notion of a secular bond bear market.

For the stock market rally to continue through 2024, the ten-year bond yield will need to drift toward 3.0%.




Long Idea: The Allstate Corporation (ALL) @ $137.29
Industry: Financials; Insurance
Click here to view the trading alerts that followed this recommendation

Trading Parameters
Status Closed
Entry Price$137.29
Entry Limitsee comments
Stop LossN/A
Adjusted Target $170.00

Long Option Trade Parameters
Status Closed
Type Call
Option Symbol ALL240419C00135000
Entry Price $10.00
Strike Price $135.00
Expiration Date 4/19/2024
  Add to Position Tracker

BACKGROUND: The Allstate Corporation is the third-largest property-casualty insurer and the largest publicly-held personal lines carrier in the U.S. The company also provides a range of life insurance and investment products to its diverse customer base. It provides insurance products to households through exclusive agencies and financial specialists in the U.S. and Canada. The company was founded in 1931 and is headquartered in Northbrook, Illinois.

SKINNY: Total revenues increased 9.8% to $14.5 billion in the third quarter of 2023. Allstate Protection Plans continues to grow its embedded protection offerings with U.S. retailers and internationally. The Company FY24 recently spiked higher and it has strong growth trajectory and potential for high earnings in 2024. A breakout through $141.00, could lift shares to $165.00, longer term.

Key Fundamentals
PEG  0
Book Value  48.06
Institutional Holdings  80.56
Price/Sales  0.65
Average Daily Volume  1.6M
Shares Outstanding  261.69M
Market Value  35.96B
Insider Activity  11 Buys 4 Sells
52-week High  144.99
52-week Low  100.57
Annual Earnings Estimate  -1.99

Analyst Coverage
 UBS Maintains BUY  

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