• 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
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • 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
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

Calm Before the Buying Storm

We have not seen intraday action this narrow since the market correction began in February, and here's what that means.
By JAMES "REV SHARK" DEPORRE
Apr 22, 2020 | 04:38 PM EDT
Stocks quotes in this article: SNAP, CMG, TXN

Positive responses to earnings from Snap (SNAP) , Chipotle Mexican Grill (CMG) and Texas Instruments (TXN)  provided a convenient reason to put some cash to work on Wednesday. The Covid-19 data continues to improve and the push to reopen the economy is gaining some traction, despite an intense political battle and that helped to calm the markets.

What was most notable about the action on Wednesday, however, was how calm it was before it picked up in the final hour. We have not seen intraday action this narrow since the market correction began in February. It is an indication that some of the emotion that has been driving the volatility is starting to dissipate.

One factor that many bears seem to be underestimating is the level of liquidity. As the action started this morning, it was obvious that there was plenty of "hot money" looking for action. These traders have little concern about the bigger technical and fundamental picture. They are primarily focused on trying to catch some action in names like SNAP or CMG.

This liquidity-driven action confuses the bears, who can't figure out why all the negatives out there are being ignored. This action also produces the day-to-day inconsistency which seems quite random.

While the action was positive, it did little to change the big picture. We have a "V"-shaped move off the March lows that has stalled and is looking for support. The issue now is whether Tuesday's lows become that support and whether there is sufficient buying power to challenge the last six weeks' highs.

This market is driven by an unusual mix of fundamentals, macroeconomics, technicals, and liquidity. Those forces are changing on a daily basis and it is why we can see the indexes down 3% one day and up 2% the next. Don't read too much into that movement. This market still faces substantial challenges longer term.

Have a good evening. I'll see you tomorrow.

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, DePorre had no position in the securities mentioned.

TAGS: Earnings | Investing | Stocks

More from Stocks

Get Rich Slow

Paul Price
Apr 21, 2021 7:00 AM EDT

Get-rich quick schemes offer little more than pipe dreams. Here's the way to become wealthy over time.

Corrective Action Is Spreading

James "Rev Shark" DePorre
Apr 21, 2021 6:56 AM EDT

Many small-caps have been correcting for weeks, and that is starting to spill over into other areas of the market now.

The Pullback Is on Schedule

Helene Meisler
Apr 21, 2021 6:00 AM EDT

Now, let's look at 2000, and see if we can spot any similarities....

If It Growls Like a Bear and Smells Like a Bear ....

James "Rev Shark" DePorre
Apr 20, 2021 4:29 PM EDT

We are no longer in a bull market that will forgive our mistakes, so take precautionary measures. Here are a few I recommend.

Taking a Look at IBM's Technical Turnaround

Bruce Kamich
Apr 20, 2021 3:13 PM EDT

Here's where to go long.

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

  • 04:17 PM EDT REAL MONEY

    Wednesday on Real Money Pro

    Get-rich quick schemes offer little more than pipe...
  • 11:09 AM EDT GARY BERMAN

    S&P Futures

    FIBOCALL: The S&P futures was off 1.5 %... ...
  • 07:47 AM EDT CHRIS VERSACE

    Positive News for a Cannabis Play

    Good news for this name in the Stocks Under $10 po...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 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