We have a messy start to the week as the indices are trading down and breadth is running 2 to 1 negative, but pockets of strong momentum continue. The chasing of the hot names isn't as smooth but there is still a long list of names up more than 20% intraday.
One interesting area of speculation is bitcoin (GBTC) which jumped back up after taking a hard hit last week. There is news that Guggenheim may put as much as $500 million into GBTC. This sort of speculation is adding momentum to the idea that bitcoin is starting to take over as the 'safe haven' play that once was gold. Bitcoin-related stock plays Riot Blockchain (RIOT) and Marathon (MARA) are up on the sudden reversal.
The SPAC sector remains very active but there are some reversals hitting as selling into strength is picking up. One name I'm nibbling at is Hyliion Holdings (HYLN) which sold off after announcing it was calling its warrants. Last week's Stock of the Week, Trine Acquisition (TRNE) remains one of my favorites.
The dip buyers are looking less confident this morning and that is going to trigger some additional profit-taking if stocks don't bounce better fairly soon. There are some big recent gains to protect.
Some downside action at this point is not a bad thing as we need some charts to reset but one worry that is on the mind of some folks is a flood of offerings to take advantage of the recent strength. That would slow down the momentum substantially if more deals are announced.
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The situation for bitcoin investors right now is tough, but as we look at the crypto exchange-traded funds and the digital currency, I see one good 'option.'
If the earnings report is bearish, here's what to know.
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