For many old-time traders, the action Tuesday morning brought back memories of 1999-2000. It is not quite as frothy as it was back then, but a big gap-up in a market that is already very extended gives this market some of that old-time emotion.
The immediate reaction of many market players is "this can't last" and "it would be stupid to chase it". Those are the logical and prudent responses, but they aren't necessarily the most profitable ones. There is still plenty of strong, tradable action. Breadth is a very stellar 4900 gainers to 1775 decliners, and the number of new 12-month highs is around 1400.
This market may be extended by just about any measure, but that doesn't mean you should be fighting it.
Once again, I remain focused on trading individual stocks. Some of the names on my list that are acting well today include ETFMG Alternative Harvest (MJX) , Aimmune Therapeutics (AIMT) , Sorrento Therapeutics (SRNE) and Genco Shipping (GNK) .
One name I'm watching very closely here is LexinFinTech Holding (LX) . It has initial coverage from Goldman Sachs today, and a target price of $21.90.
The China FinTech sector has been very difficult recently, due to increased regulation, but I believe this has been largely priced in and the stocks should put up some good numbers when they report. The stock needs to move over $15 to get on track, and I'll be watching for that closely.
Overall market momentum looks like it is slowing a bit after that strong open, but I expect to see very stubborn support for a while. While the action may be frothy, that means there is the likelihood of some rest rather than a collapse.