The indices continue to chug along, especially the Nasdaq which is enjoying strength across the board in the FAANG names. Breadth is so-so with about 3,750 gainers to 3,000 decliners but the list of new 12-month highs is hitting around 1,000 which is quite extreme.
Some pundits are attributing the positive action to the 'bad' payroll numbers. The argument is that this supports a more dovish Fed. Maybe, but, as the astute Daniel Rosenblum noted, based on the immediate reaction to the numbers this morning it looks more like the computer algorithms just aren't playing the news like they had previously. They have moved on to other things and the market just doesn't see the numbers as very significant right now. Neither the Fed nor economic reports are driving the action right now. It is more about price action and momentum.
The speculative small caps plays have cooled off a bit with many of the early movers reversing. My list of stocks up more than 10% is fairly narrow with about 20 names such as China Techfaith Wireless (CNTF) , Innovative Industrial Properties (IIPR) , a cannabis play, and Momenta Pharm (MNTA) .
This market is badly in need of some resets as it has been nearly straight up the first week of the year. The talk about frothy and frenzy needs to cool off a little before another strong leg emerges.
One positive on the speculative front is that the bitcoin plays are showing some life today. Overstock (OSTK) remains a leader but others that have limited exposure like Square (SQ) and Paypal (PYPL) are showing up. I'm looking to add to a position in MGT Capital (MGTI) .
I'm looking harder for position trades into upcoming earnings. There should be some good ones that will run on expectations and I'll be trying to position to catch some moves. It would help if the bulls took a break but they look like they don't want to be reasonable.
