• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing

A Negative Market Narrative Does Battle With Positive Price Action

Bears always sound smarter than bulls. Pessimism sounds profound and insightful, while optimism sounds shallow and naive.
By JAMES "REV SHARK" DEPORRE
Oct 18, 2021 | 06:38 AM EDT

Currently the bears have some pretty convincing arguments against further market upside. China's economic growth is slowing, and inflation is being driven by supply-chain problems and increased energy prices. Interest rates are rising, and central banks are running out of ammunition. Bears will also claim that valuations are unreasonable and much of the market is in a bubble.

Despite these compelling negative arguments, stocks managed a strong rebound last week. After the CPI numbers were released on Wednesday morning, stocks moved sharply higher and finished at the highest levels in several weeks on Friday.

The bounce created some overbought technical conditions and enticed some traders to take fast profits, but the positive price action changed the tone of the market. Some good earnings reports helped, and the negative seasonality of the last couple of months is coming to an end.

The question now is whether the bears can regain their edge due to the macro worries or will these negatives help to build the proverbial 'Wall of Worry'. Markets often climb a wall of worry when there is hesitancy to put cash to work, but as stocks act well, those on the sidelines start to inch in and do more buying. That buying drives up stocks and causes more people on the sidelines to go to work.

Stocks were extended after the bounce last week, and the slow China growth is providing an excuse for some softness this morning but did the action last week create a new crop of dip-buyers, and will earnings reports create some positive responses?

The negative narratives are growing loud but will they kill the positive price action that started developing last week? That is the battle we face, and the best way to deal with it is to watch the price action. Some downside is justified at this point, but we need to watch support levels and see how much interest there is in buying softness.

We have a negative start to the week, and it is the FATMAAN names leading to the downside. Bitcoin remains hot on the launch of a futures ETF, but many market players are debating whether that may mark a short-term top.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, James "Rev Shark" DePorre had no position in the securities mentioned.

TAGS: Bitcoin | Earnings | Economy | ETFs | Investing | Markets | Stocks | Trading

More from Investing

To Improve Your Trading and Investing, Spend More Time on Exit Points

James "Rev Shark" DePorre
Aug 13, 2022 10:00 AM EDT

For many investors, the best way to sell is to have a highly mechanical system that removes subjectivity.

Royal Investing: 3 High Yield Dividend Aristocrats

Bob Ciura
Aug 13, 2022 7:00 AM EDT

Here are the three highest yielding Dividend Aristocrats available right now.

Market Whips Up a Melt-up

James "Rev Shark" DePorre
Aug 12, 2022 4:21 PM EDT

This action is primarily caused by poor positioning, rather than a sudden improvement in fundamentals.

How Charged Up Is FuelCell?

Mark Sebastian
Aug 12, 2022 3:26 PM EDT

I see some energy here, at least for a trade.

Delisting of Chinese ADRs Is Part of the New Cold War

Jim Collins
Aug 12, 2022 2:00 PM EDT

The process of dealing with a delisted stock is painful for individual investors and impossible for many institutional investors.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:40 PM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    To Improve Your Trading and Investing, Spend More ...
  • 08:44 AM EDT PETER TCHIR

    CPI Beats Expectations, But Maybe Not the 'Whisper'?

    Slightly better-than-expected inflation across the...
  • 01:44 PM EDT STEPHEN GUILFOYLE

    This Holding Lights Up With Strong Earnings

    Check out the latest from TheStreet's Stocks Under...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login