Wednesday Wrap-Up: Don't Let the Dow Get You Down - TheStreet

The Dow may have disappointed investors yesterday, but it's redeeming itself in trading Wednesday, Nov. 21. 

It's been one roller-coaster of a week and I'm sure everyone is ready for a break. Guess the holiday couldn't have come at a better time. Well, for American investors at least.

Here's your reminder that the New York Stock Exchange will be closed Thursday, Nov. 21 and it will have a half-day--closing at 1 p.m. ET--on Friday, Nov. 23. 

Is This Even a Bear Market?

TheStreet contributor Jonas Elmerraji digs in.

Turkeys aren't the only ones getting slaughtered this Thanksgiving - the week heading into the holiday has been a trying one for investors, with selling Monday and Tuesday dragging the S&P 500 back down to the lows set back in October during the worst month for stocks since 2011.

A Morgan Stanley equity strategist got considerable attention amid the selling when he made the bold claim that we're in a bear market in a client note on Monday.

But are we? Is the bull run investors have been enjoying since 2009 finally over?

It's a fair question.

It certainly feels like a bear market in a lot of respects. Quantitatively, the fact is that the sort of selling we've seen in the last couple of months is rare in a bull market. In the last three-plus decades, there have only been three years when the S&P 500 has fallen 5% or more during October.

Observant market watchers will point out that around 40% of S&P components are now officially in "bear market territory," having backslid 20% or more from their highs. But that definition is completely arbitrary - and it doesn't take into account the fact that the broad market had given investors total returns of almost 35% from the start of 2017 into the highs this year. Most of the stocks that have corrected the hardest are the same ones that led the market higher during that stretch.

Well, guess I'll have to take back my un-bear-able pun, huh?

Keep Calm and Trade On

Kenny Polcari, director at O'Neil Securities discussed the market with TheStreet.

When the market opened on Wednesday, Nov. 21, the Dow was up over 150 points, which was a turnaround from when the market closed Tuesday.

At its low, the Dow dropped over 640 points during intraday trading Tuesday.

Polcari said that the rebound in the markets was proof that the market's down day Tuesday was a test.

What Should Investors Keep Their Eyes On?

Polcari said that the market rally, in his eyes, could continue into Friday trading.

He doesn't expect to see a huge loss in the market as Wall Street gears up for the holidays.

Still Got an Eye on the FANG Sector?

TheStreet contributor Bret Kenwell takes a look at the best FANG for your buck right now.

And, no, I'm not sorry for that pun.

While FAANG stocks were under pressure throughout October, Apple (AAPL - Get Report) was helping to keep the market afloat.

Although just one company, its $1 trillion market cap acts as a significant weight in the S&P 500 and Nasdaq indices. So as the waters began to get choppy, many investors were able to hide out in what they belieed was one of the safest vessels still around.

Then the company reported earnings, and that safety line keeping the boat near the docks disconnected and out wandered Apple into the violent and volatile sea with the rest of FAANG.

Down more than $50 from its highs just last month, Apple is now in bear market territory. It joins Facebook (FB - Get Report) , Amazon (AMZN - Get Report) and Netflix (NFLX - Get Report) in that infamous territory. However, with Wednesday's rally, Alphabet (GOOGL - Get Report) is out of its bear market, defined by a decline of 20% or more from the highs.

While it may not maintain that status for long, it's an encouraging sign for investors looking for any sort of hope in this market. It also begs the question, is Alphabet the best FAANG stock to buy?

Thankfully for Alphabet, we're not talking about a profit-less, debt-ridden overvalued entity. In fact, the company is quite profitable and trades at a relatively healthy 25 times this year's earnings. That may not seem all that reasonable to some investors, but for a blue-chip technology stock with 20% annual sales growth, I find it reasonable for long-term investors.

And that's a wrap for Wednesday.

Alright folks, I hope you all have a very happy Thanksgiving and that you enjoy the break from the market. 

Catch y'all later.