We have some frothy action to start the day, but it is cooling off about 45 minutes into the trading session. Breadth is still quite good, especially on the NYSE where it is better than two to one. The new 12-month high list is over 350 and, of course, the indices are hitting new all-time highs as well.
There are some signs of selling into the strength especially in technology names. The Nasdaq 100 ETF (QQQ) is well off the early highs and is lagging with a gain of just 0.13%. Apple (AAPL) is in the red and that is causing most of the selling pressure. The S&P 500 is leading with a gain of 0.4%.
I've sold down a few names into strength such as Alibaba (BABA) and Micron Technology (MU) but I don't have nearly as much to sell as I'd like. Biotechnology is leading with big gains in bluebird bio (BLUE) and Juno Therapeutics (JUNO) but that is fading a little as well.
Pundits were scratching their heads over the reasons for the strength this morning but it is just another example of price momentum being more important than news flow. The delay in tax policy is being totally ignored and there is no concern about the FOMC interest rate announcement this afternoon. The big fear is missing out on more upside.
There are plenty of landmines this morning in individual stocks but hopefully that will lead to some opportunities. The emotions in this market are strong and that is a concern but if it leads to increased volatility many traders will be thankful for the shift.