BOB LANG: Good morning, Action Alerts Plus subscribers. It's November 21, Monday. Time for our rundown. Lots to cover so let's go ahead and get rolling on this thing.
So as we kick off the holiday-shortened week, stocks are modestly overbought currently, which has me eyeing this range between $3,900 and $4,000 on the S&P 500.
We're a little bit wobbly this morning, of course, down about half a percent on the S&P 500, which basically tells us that there's a lot of stops being taken out on the top side and the bottom side. We did see a little bit of a rally this morning. And we're now running down right now at about 10 o'clock this morning. Stocks moving up and down and all around here right now.
So basically, we have some big movements here. The volatility here is starting to rise. We're about 23 and 1/2%, 24% on the VIX, which tells us that we're going to have an expansion of the range if we get above that 25% level. So we'll be watching that very, very carefully.
We recently saw sellers emerge above that $4,000 area earlier in the week of last week. And then we saw $3,900 level holding nice and tight towards the end of last week. So we can see that there are some buyers there, down below $3,920, or $3,910. Sellers emerging above $4,000 maybe about $4,020.
So that's a range that we have to pay attention to. And if we get a breakout over that $4,000 range or below the $3,900 range, we'll be playing it accordingly. There's plenty of demand for stock in these areas, especially in the $3,900 area, so there's going to be a potential for a sharp breakout if we do get that move past $4,000.
Now, this weekend, we heard of more lockdowns in China. Hence, the China-based names are taking a good solid hit today. We learned of a potential rail strike that could be ominous before the start of holiday shopping season going. And Black Friday is coming up, of course. This is the day when most retailers move into the black from the red for the year.
Now, while retail sales last week showed a brisk amount of buying in October, I think the jury is still out here for the holiday. Will deep markdowns be enough to attract buyers to the stores, to clear out heavy inventory levels? Or will retailers simply just throw in the towel in 2022 and say, that's it, and get ready for the new year? That's a really important question to ask.
Wednesday brings the minutes in the last Fed meeting, of course, from three weeks ago. This is often something that will jolt markets right away and as policy shifts can be read through the tea leaves. We do not believe that there will be much to discern, though, from these notes. Nothing different than what the Fed governors have recently been talking about. But traders are always jumpy. Algorithms always cue in to certain words and phrases from these minutes and other reports as well, too.
And finally, it's nice to see Disney popping here. We have Disney, of course, in the bullpen. We haven't had it in the portfolio for a while. But listen, replacing the CEO, which has happened last night. We heard that Bob Chapek, who is the CEO, is being replaced by the old CEO, Bob Iger.
We think that the replacing the CEO was just simply one step to recovery. And in a very challenging situation, we could see the new CEO make some draconian cuts before too long. We did not see this move as being something that triggers us to move Disney up from the bullpen. But we'll be keeping an eye on it. And in fact, the stock is just back to where it was prior to earnings.
So again, we'll just be keeping an eye on it. And if we have some interest in finding that the stock is on the move, we'll be looking into moving it into the AEP portfolio. But for now, we'll just keep it in the bullpen.
Have a great day everyone. That's going to be it for the roundup. And we'll see you back tomorrow.