After the poor action on Wednesday, market players were a bit nervous this morning but the dip buyers didn't hesitate at all and immediately had the indices and most stocks up from the opening lows. Breadth is slightly positive and the list of 10% movers is fairly long but the number of stocks hitting new 12-month highs has dropped sharply to just 135.
When the number of new highs drops that usually means that there is rotation action taking place. The hot SPACs have cooled off but there is still a few that are moving well like RMG Acquisition (RMG) and Social Capital Holding III (IPOC) , but the group is seeing much more volatility now.
The main group seeing big moves is biotechnology. That is where the hot speculation is right now. Uranium names like Cameco (CCJ) are active and there are a few other themes but it is mostly biotechnology that is leading.
As I mentioned on Tuesday I raised my cash levels to around 50% but I'm not bearish. I'm just looking to take advantage of some mild corrective action and will be aggressively buying when I see opportunities.
Yesterday the market dropped sharply when the DoorDash (DASH) IPO opened for trading. Traders will be looking for a similar computer algorithm to hit when Airbnb (ABNB) opens for trading later.
The market and many stocks need some rest but the underlying support is strong and there is still an appetite for speculative stock picking. It is narrower action and more volatile but nothing much to worry about at this point.