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It's historically likely fintech companies have reached a bottom, says Strategas' Verrone - YouTube
Channel: CNBC Television
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chris so we bounced but what do you make
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of of the charts right now for the s p
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hamilton well i think number one we
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ought to distinguish between an oversold
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bounce
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and a major capitulative bear market
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bottom i think there are two different
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things it's not difficult to make a case
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that we're tactically oversold here and
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you can rally you know into late june
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into july i'm not opposed to that but in
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terms of the conditions of a major bear
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market low i just don't think we can
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check enough boxes i mean capitulation
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is defined by
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swellings of volume haven't seen it it's
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combine
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it's defined by big spikes and put call
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ratios haven't had those it's defined by
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vix above 40 45 50 haven't seen that so
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i think we need to distinguish here
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between bounce and major bottom i don't
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think this is the latter and i would
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also just add remember
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upwards of 60 of the russell 1000 is
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back to where it was pre-coveted if s p
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went back to where it was pre-coded and
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followed that script you're talking 34 3
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500 s p
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that's been our target i don't think
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that's a stretch given what the
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conditions look like under the surface
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here
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and and in the path to roughly 3 500 on
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the s p
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500 chris you say apple has a long way
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lower to go
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yeah i think you know these these
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declined or these capital lows are often
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characterized by
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the best stock of the cycle falling last
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and hurting people and that's been apple
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this entire cycle and i just don't think
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we're done there apple is not at major
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support yet major support we've called
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apple is at par apple at 100
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that's the long term 200 week moving
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average on apple that's been support
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many many many times over the course of
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this 10 or 12 year cycle i think apple
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200 microsoft to 200 tesla to 450 those
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are some of the levels you want to kind
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of keep in mind of okay where does this
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index ultimately bottom with those
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stocks in those areas
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did you you said tesla to 450 microsoft
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to what level
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microsoft 200 is kind of long-term
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support there so i mean you're still
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talking about between apple and
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microsoft that's that's down 15 to 20
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from here uh on both those names
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wow so these are the big cap tech stocks
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and these are the generals right so in
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in the last stages um they come for the
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general so to speak chris but we've
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certainly seen a lot of other sectors
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being taken out much earlier it's been
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sort of a rolling correction that we've
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seen particularly in a lot of the
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innovation stocks and the fintech stocks
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and i'm wondering is it possible chris
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that there are opportunities there that
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they have perhaps staged some sort of a
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bottom or close to a bottom
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before these big cap generals have
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well i think not only is that possible
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that that's frankly historically likely
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you know by the time you get to your
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index low
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most stocks have typically bottomed i
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think of like 2008 2009 the s p bottomed
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in march of 09 but most stocks actually
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bottomed in october of 0.8 so there was
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a six month gap between when most stocks
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made their loan when the index did so
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mel i think that's the appropriate way
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of thinking about that here now i don't
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think we should confuse a price low in
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some of the speculative stocks
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with their resumption as leadership
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though that's a bridge too far for me i
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don't think these stocks that broke
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first are going to suddenly re-emerge as
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your leadership but i am totally okay
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with the idea that they bought them
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before the index does
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so it there could be a trading bounce in
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some of these names is that fair to say
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chris and i'm wondering what what
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pockets are you looking at for that
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i think i think that's reasonable
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remember we kind of have a little bit of
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a
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purgatory quiet period here before we
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start to get july earnings uh in the
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second half of july seasonally frankly
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the next six weeks are not bad we do
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have some of those oversold conditions
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so i wouldn't be shocked if you got some
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of that speculative tech to bounce here
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but again
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is it really gonna re-emerge as your
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leadership on the other side that's
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where i'm skeptical last question chris
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a lot of people want to uh to enter
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energy right now with the pullback that
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we have seen is that smart or do you
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wait
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i think energy is going to remain your
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leadership here i recognize it's gotten
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slapped around here
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uh these last week uh last week or so i
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i think it's really endemic of a bear
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market that they're coming for
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everything now so energy has been sold
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but it's been sold in the context of an
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uptrend and i think really important
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despite the weakness and energy equity
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over the last couple weeks there has
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been no stress in energy credit i am
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much more comfortable buying weakness in
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a sector when credit conditions are
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relatively stable that's still the case
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with energy
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chris thank you good to see you thank
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you you too christopher
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