Charles Payne

The sell-off of high-flying momentum stocks that began a few weeks ago, like the proverbial snowball that became a boulder by last Friday, is taking a massive toll on names that had been virtually unstopped. In the grand scheme of things, most of the biggest losers were overdue to give back some gains. Either they were up beyond the boundaries of imagination, or they have been on automatic pilot for so long that losing altitude was inevitable.

Market watchers often talk about how healthy pullbacks, and even corrections can be for the stock market over a long-term, but digesting gains this fast doesn't make most people feel better. If we were treating heartburn, speed would be nice in that case; the pace of this selling is creating, an even greater heartburn.
What is interesting is that there is not a great sense of panic per se. In fact, many investors have been bracing for this for a while. I have only gotten a few distressing emails, which comes with the territory, even as we have taken a ton of profits last month, and have asked subscribers to hike their cash position to as much as 30%. This is the point where I like to remind investors that I regret 85%, or more of all the sells ever made in the stock market, and more than 90% of sells are based on emotions, even when our modeling work and common sense suggest holding, and even buying.

This is the End

For a couple of years, predicting the end has been a cottage industry from the Mayan calendar, to the legend of Ragnarok, (Doom of the gods) that states Odin was to be killed February 22, 2014, by the wolf Fenrir.
The old Norse legend has taken on more significance as foretold that it would precede by the "winter of winters." Calling for the end and fear mongering are not new, just more profitable.

In fact, the rally has lasted so long, it's not just book-sellers, foes of the Fed, natural curmudgeons, and traders that would make a mint on increased action, (especially on the downside), but politicians are getting in on the act as well.

Setting up the Blame Game

Rep. Barbara Lee

While promoting HR 1579:

In recent weeks, investigations of high -speed trading on financial markets have underscored the negative effects these trades have on the U.S. economy. The Wall Street Journal reported in March that high -speed trading programs "can encourage traders to engage in strategies that boost volumes, but harm other investors."


Charles Payne

Charles V. Payne is a regular contributor to the Fox Business and Fox News Networks. He is also the Chief Executive Officer and Principle Analyst of Wall Street Strategies, Inc. (WSSI), founded in 1991 which provides subscription analytical services to both individual and institutional investors.