Some of the themes that have been red hot since the election reversed today, but there were still some pockets of emotion driving the action.
Financials and biotechnology reversed down while FANG names Alphabet (GOOGL) , Facebook (FB) , Apple (AAPL) and others reversed up. Technology stocks that have been slightly positive gained momentum today with semiconductors taking the lead. (Alphabet, Facebook and Apple are part of TheStreet's Action Alerts PLUS portfolio.)
What really surprised traders today was the crazy action in bulk shippers such as Euroseas (ESEA) , DryShips (DRYS) , Globus Maritime (GLBS) and Seanergy (SHIP) . There wasn't an obvious catalyst, but the stocks traded like Internet stocks back in 2000. We have not had the sort of crazy momentum that DRYS experienced in years. There have been a few crazy movers, but this sort of speculative excitement is rare and it is somewhat worrisome that it is occurring on top of such a sharp move to the upside. I'm not a contrarian, but you have to wonder about emotions when we have action like that.
Trying to decide whether a market has become too frothy or is overbought is a tough game to play. What seems reasonable just isn't a standard that works very well. We had some indications that market players were looking to lock in gains, but there was still plenty of underlying support to prevent anything dramatic.
My Stock of the Week, Twilio (TWLO) , did what it needed to and closed strong for the first time since it topped out around $70. It is in good shape for some follow-through and now has a base of support.
Small oils are set up well, and if US Oil Fund (USO) can gain further traction, I'll be working on some trades in that sector.
It is still a very emotional market, but the trading opportunities are looking good. We don't have action like this that often, so it is important to take advantage if we can.
Have a good evening. I'll see you tomorrow.