After some frothy action yesterday some profit taking has kicked in today. The bitcoin plays have pulled back which is helping to cool the speculative fervor but many have already bounced back from early lows.
There isn't any specific fundamental reason for selling today but it is healthy from a technical standpoint as many stocks have become extended. Breadth is not bad with around 3,000 gainers to 3330 losers. There are still over 350 new 12-month highs.
The bitcoin critics are jumping up and down this morning and shouting "I told you so." Apparently they don't realize that highly volatile stocks move in both directions. The market is sorting out the garbage from the better quality names which is what always happens.
I believe the bitcoin frenzy is far from over and will continue to look for setups in the various names. The fact they are high risk and very volatile is what makes them good trading vehicles. You better know how to handle risk if you are playing in this playground but that is what traders do.
My Stock of the Week, Remark Media (MARK) is moving out of its base this morning and is up 30% so far this week which goes to show that there are good opportunities outside the bitcoin group. Twitter (TWTR) another recent buy is holding up well.
I'd like to see more downside in the indices as it would help create some better setups in individual stocks. This remains a very good environment for active traders.