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Robert Pavlik, Banyan Partners chief market strategist, weighs in on the market reaction to S&P’s warning to Europe's AAA-rated countries that t...
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Is easy to do.
Our first guest says Christmas came early on Wall Street but the big question is how Long Will Santa class stage joining us now -- Catholic opinion partners chief market strategist Bob.
You said the C and it came early but we need him to deliver as a big present at the ended the year a lot of big firms investment firms hedge funds a lot of portfolios at -- counting on a Santa Claus rally what will make Santa come back.
For the markets rallying based on some of the positive news out of -- -- gotten some plans out of Europe and that's given some hope that the market.
-- the market also -- a short covering rally based on some of that news.
And as we approach the end of the year and most of the tax loss selling has been pretty much taking care of a lot of portfolio managers out there -- competition probably found themselves lagging behind the market in so what -- they have to do they see the market started to move they have to get invested.
And they have to start to position their portfolio heading into the year -- I think that's what's going on right now so we -- short covering some of the news out of Europe.
And again folks this really trying to catch up.
What are your thoughts on meet maybe potentially putting some capital to work right now on the -- except perhaps we'll get this ended the year rally may be.
Make some money.
You know there aren't invested right now I think what you really want to be doing is looking at 1265 and the S&P we're just a few points away but we what we have to see is the market.
Get to that level surpassing and then stay above -- released the couple three days if we can get above that -- stay there -- that couple three days then you start to feel a little bit more secure.
But we have had a pattern over and over again that this Morgan gets to this resistance level in pulls back rather sharply.
Right I mean and that's -- that's why we have some thanks there because you're talking about the 200 day moving average.
We got -- late October early November we have pullbacks of six and 9% respectively quick poll tax -- that.
Let's say we do get above -- them and we start to built up a little momentum you've talked about your your pick your peers and fellow money managers certainly.
There would be an anxiety not to -- let let the let this friendly the station.
We can actually see a huge rally into the into the you're currently.
I think you can.
And really there's no one that's -- partners -- but that's beside.
-- the market does have the potential to continue to move forward but we do have some headwinds going into next year so I think you really -- -- be cautious.
These Smart about it you -- somebody gave me some great advice early on my career they said don't be stupid and so don't be stupid about what's going on right now.
We're -- -- challenges overseas and.
I don't we only have a plant -- -- -- -- but when you missed the rallies affiliate I mean so.
Don't be stupid we start to take off and we -- we stay above the 200 day moving average of three of -- and you can see volume picking up momentum picking up.
Do people have to take advantage of and worry about.
Next year when mixture comes.
You make a good point the market hasn't been picking up any volume ever since Wednesday of last week when we got almost 500 points in a single day on the Dow.
We have been seeing -- get above 900 bill million shares.
So we haven't even broken a billion share mark since last Wednesday what we need to see is not only of surpassing of that 200 day but we also want to see that -- starting to pick up.
That will indicate to you that people are starting to believe in what's going on.
Okay short of this -- 1265 number being reach I know let you have a couple of picks out that it had a sort of independent and what's happening with the S&P.
Last time -- -- on October you are making more of some consumer related -- betting on consumer spending Amazon apple mcdonalds be -- Now you're singing a different -- what do you like.
I still like those again -- we're more long term investors McDonald's has been doing fabulous Amazon has been pulled back.
People -- starting to worry about some of the consumer spending during the holiday -- we had some good.
Black Monday -- -- black Monday sales Black Friday or Cyber Monday it was -- That was quite enough cash broken Merck on your list now that's something you didn't -- in October.
Actually have been in those names for quite awhile but Coca more -- through terrific names I think going forward -- -- held and we've held our core poised for a long time.
And it hasn't participated.
In this pullback -- it hasn't participated in them -- more recent rally so I think as you go into next year and there's a little bit of concern for the at least the first half.
-- would be a terrific -- to get into.
You know any high beta names that if we do break down -- sort of listen -- -- parabolic move of the market.
You know names that I like I still like Amazon longer term it has been -- back.
But I still think -- that the holiday season's going to do locate.
Weren't so I would and I was slightly disagree with you and I here's a lot from a lot of Wall Street analysts every time the market makes little -- up they say -- was short covering -- short I know.
There really steadfast and you know sort of stock at a hundred two they still think it has more room to the downside.
They don't necessarily blinked -- off limits may be a debate we can get into what later than we have more time but that's one area I'm just not so sure I -- that a lot last month.
Last Wednesday I can guarantee you the shorts were covering early docking guarantee it.
Our grant to sounds that -- the -- Aaron thank you Bob Catholic opinion partners chief markets.
