It was a roller-coaster day for the indices, but there were quite a few big moves in highly speculative individual stocks. There was also rotational action as small-caps finished up nearly 1% while the S&P 500 was flat. Breadth was very good after three poor days, but this time the FANG names lagged.
It was an odd mix, but there were positives for both bulls and bears. The strong trading in uranium names like Cameco (CCJ) , steel like AK Steel (AKS) and Mechel (MTL) and small biotechnology like Neuralstem (CUR) and Genvec GNVC provided an upbeat tone for the hot money. However, the intraday reversal in the S&P 500, lagging FANG names and weak oil had the bears looking to increase positions.
The conventional wisdom is that the crazy moves in some of these junk names are a sign the market is close to a top. The prime example is what happened in 2000 as the intraday speculation hit its peak. This action isn't even close to what happened back then, but it tells us something about the emotions that are in play right now. Traders are not worried too much about risk, which is why I have at least eight stocks on my screen that had moves of over 20% today.
Depending on your style of trading, this is a great market or a very difficult one. Regardless of how you feel about it, the important thing is to make sure you stay vigilant and manage your risk. Hot speculative action tends to turn very fast.
Have a good evening. I'll see you tomorrow.
