It's clear Santa got too cocky a week ago and probably drank too much eggnog. So many stories of the market moving to autopilot and cruising out the rest of the year lured would-be buyers to the sidelines.  Consequently, sellers have become even more anxious. Selling begets selling, especially when investors are promised that the market will be higher. Yesterday was an ocean of red, and suddenly, there was a tide of frustration and angst.

Elusive Winners

Remarkably, the market is up this much with so few “winners.”  A record-low number of stocks are outperforming the market this year.

On the one hand, this suggests lots of opportunities or indicates a market that has been held up almost like a Potemkin village by a few dozen names. Once these names fade, the jig is up broadly.

There are many opportunities beyond those mega-growth names, but those will not stay down for an extended period. I like these periods of weakness even though we have to field more calls and emails. This is a top value proposition of what we do, but it's tough after major “winning streaks.”

Up volume on the NASDAQ Composite stands out big time as a potential component for a buy signal.

Market Breadth	NYSE	NASDAQ
Advancers	1,099	1,706
Decliners	1,709	2,656
New Highs	24	95
New Lows	160	165
Up Volume	802.86 million	4.29 billion
Down Volume	1.79 billion	3.17 billion

Hold for Buy Signal

This is the perfect time to reassess your potential buy list. Once you have narrowed your list, the key is when to pull the trigger. We don’t pull the trigger on down days but begin to salivate during pullbacks.

I’d like to see the Fear & Greed Index slip into ‘extreme fear” and hold at key support points and moving averages.

Message of the Session

Economic data yesterday further revealed how weak the great 2024 rally has been. It is just the latest to underscore that the “strong economy” is a farce.

The Chicago Purchasing Managers’ Index (PMI) swooned big time and has been in contraction in 26 of the past 27 weeks.

Yes, there are pockets of this economy that are fabulously wealthy, spending money, loving life, and earning dividends from money markets and other investments that most Americans can only dream of as they struggle to pay monthly bills. 

America is racing toward a $30 trillion Gross Domestic Product (GDP), so there will always be opportunities, but recent growth has been very lopsided. I think the Federal Reserve must be blown up and rebuilt to serve the masses, not just the wealthiest.

I’m confident Trump 2.0 will affect positive change that exceeds expectations. Be wary of the experts who love the status quo. The key will be for the public to have patience.

Today’s Session

Major indices are showing some signs of recovery this morning.

The CBOE Volatility Index (VIX) is moderating as well.

Natural Gas is consolidating this morning after a surge of 16.35% yesterday on forecasts of colder than expected temperatures in January.

Happy New Year

Happy New Year & God Bless

Charles V. Payne

Reminder that the market will be closed tomorrow and there will be no afternoon note.

Comments

Hope you have a Happy New Year. Your family and the people that work with you that help us all Makin Money. Thanks Dave Ellis on 12/31/2024 10:32:10 AM

Thank you for the all the insights, and robust dialogue ya’ll provide on Making Money. This year has been interesting to say the least. I’ve learn a lot from the show, and always dig the threads and shoes. Happy New Year! Julie David on 12/31/2024 10:51:15 AM

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