The trading in Tilray (TLRY) sucked up much of the oxygen in the market Wednesday as it produced a classic "blow-off" top. The stock blasted up about $147 and hit $300 on the nose before reversing and briefly trading in negative territory. Late-day gamblers stepped up and produced a good close but its trading soft after hours.
Tilray was good entertainment but it didn't tell us much about the overall market. There was obviously some pockets of crazy momentum, especially in the cannabis sector, but the big story was strength in banks such as Action Alerts PLUS holdings JPMorgan Chase (JPM) and Citigroup (C) .
The strong action was obviously a function of interest rates moving higher and hopes that the yield curve would steepen. The 20-year Treasury Bond Fund (TLT) is testing the lows it has hit several times in the past two years and could easily break support this time.
The higher rates helped financials and oil had a good day, too, but technology was weak and kept a cap on the positive action. It was rotational action at its best and keeps the indices looking quite healthy. Breadth was slightly negative, which is the best illustration of how mixed the trading was despite what the DJIA might say.
There will be plenty of talk about how the speculative excess in a stock like Tilray is a sign of a market top. While it is an easy argument to make and there is some logic behind it, anyone who thinks they can predict what is going to happen next is sure to have already been proven wrong many times recently.
The market is still positive overall, although you have to be very selective about what you are trading. There are problems for sure. There also continue to be opportunities.
Have a good evening. I'll see you Thursday.