A confluence of two events on Thursday today helped to produce some very good strength. First was the energetic buying of another gap-down open on trade war worries. That's happened so often and so consistently that the buying has become automatic and was particularly robust.
There was also a shift back into the high growth and momentum names. For a few days, there was a shift to value plays that created the tepid momentum that I have been complaining about here. Thursday witnessed a return to the big cap, high beta names like Tesla Inc. (TSLA) , Apple Inc. (AAPL) and Square Inc. (SQ) . That good mood spread to smaller momentum names like Turtle Beach Corp. (HEAR) and Health Insurance Innovations Inc. (HIIQ) which made it feel like a real uptrend again.
It's interesting that lower-priced stocks were not being traded aggressively on Thursday. The speculative favorites tended to be higher priced names with good earnings reports. My scans of stock that had large percentage moves on increased volume only had about 25 names under $10, which is an unusually short list.
The market's biggest stumbling block recently has been the inability to build on good momentum like we had today. Too often recently there is no follow through, and the attractive chart setups fizzle out. The action today was more robust than what we have seen recently, and it caught quite a few bears and underinvested bulls by surprise, so that provides a foundation for more upside.
We have the monthly jobs news in the morning which may produce a jiggle or two but unless it is wildly different than expectations is not going to be a significant market mover. Traders are probably hoping for another gap down open on trade war worries that they can buy. Buying bad news is the easy trade these days.
Have a good evening. I'll see you tomorrow.
