Yesterday's sudden burst of momentum has mostly ended today but the retail sector is lighting things up and that is helping the mood. Breadth on the Nasdaq is negative and the number of new 12-month highs has slowed again, but there is extremely strong breadth in the retail sector.
Some of the names making the biggest moves in the retail group include Show Carnival (SCVL) , Abercrombie & Fitch (ANF) , Footlocker (FL) , Hibbett Sports (HIBB) and Genesco (GCO) . There are dozens more but virtually everything in the group is up.
Retail sales didn't suddenly improve overnight and Amazon (AMZN) isn't going out of business. The group has been under extreme pressure for a while and it has become an extremely crowded short. With good news from Walmart (WMT) yesterday and a few small retailers today the stage was set for a violent short squeeze.
It is easy to tell this is programmed buying in the sector because the stocks are all moving in tandem. The buy programs buy big baskets of retailers and don't try to discern which may have stronger fundamentals. They are playing the sector and the vehicle is a secondary issue.
Outside the retail sector it is much more sedate. There are a few big movers like Splunk SPLK, Netease NTES and Tesla TSLA but the chip sector is struggling after Applied Materials AMAT reversed and biotechnology is trading in the red.
As you ponder the action today keep in mind that next week is Thanksgiving week and traders will be looking for some wild action in speculative small caps. It is a holiday tradition that some small names make big moves and traders help to make it self-fulling. I'm looking for some candidates for the games and will be posting some ideas. One name on my screen right now is Riot Blockchain RIOT. It is in a hot sector and has a nice trading range setup. It is fairly thinly traded and should be a good candidate for speculative traders who are looking for stocks that move quickly.