After slowing in the last couple days, the V-shaped bounce has picked up momentum again today. All the major indices -- other than the Russell2000 ETF (IWM) -- are in new high territory. Breadth is running better than 2 to 1 positive and the number of new 12-month highs has expanded to nearly 600.
It is just a good old fashioned uptrend and the fact that there are some overbought readings and mediocre volume is irrelevant. The FAANG names are leading the charge, and it is obvious again that much of the buying is algorithm driven. The tenacity of the underlying support is strong evidence that program buying is in place.
The challenge of this market is that while the stocks you are holding may be performing well, it is very difficult to put new money to work. The indices are now up six days in a row, mostly on lower volume, and that just doesn't make for good technical setups.
The folks that are already long and strong are mostly quite happy with this action, but the underinvested bulls are once again struggling to put that idle capital to work. Action like this is why active hedge funds have lagged so often in recent years. There were good at anticipating last week's pullback and playing defense, but they didn't reload longs fast enough and now are suffering from performance anxiety. Some just throw money at the FAANGs or some ETFs, which is why we have this narrow leadership.
I've not made any new buys so far today. My top pick right now continues to be The Trade Desk (TTD) , but I'm moving very slow with all new buying.
