After a pause on Monday, traders are back at work today and driving the indices to new all-time highs. Breadth is very strong with around 5500 gainers to 2550 decliners. The number of new 12-month highs is around 665 as there is quite a bit of rotation among leadership stocks. The FATMAAN names were lagging early but are now leading as the momentum in small-caps is starting to lag.
There is still good action but there is some slowing and I'm seeing some rollovers developing. There is no rush for the exits but I wouldn't be surprised to see a weak finish as profit-taking picks up this afternoon.
I've been writing this quite a bit in recent months but this is a market for stock pickers. Individual trades are shaking the trees looking for new picks and once there is some momentum then other traders jump in and help to drive them.
There is some rotation taking place and it has been tough for the folks that play high beta technology names but the pockets of action in various groups like SPACs, cannabis, etc., have been very good for fast-moving, aggressive traders. There is some rotation back into the FATMAAN names which are seen as safe havens to some degree when the momentum in hot individual stocks cools off.
I've cut a few things this morning but a good example of the sort of chart that is working is Westwater Resources (WWR) which I highlighted in a Shark Bites last week. The stock is breaking out of consolidation on good volume today but my methodology is to take some partial profits along the way.
I've cut some Village Farms (VFF) this morning which has been a big winner during the cannabis run, but I have my eye on several names that I want to add such as Trine Acquisition (TRNE) and Nano Dimension (NNDM) .
Don't overcomplicate this market. It favors aggressive stock picking right now. Market timing and macro arguments don't matter much so don't spend a lot of time worrying about them. Protect profits and be ready for momentum to cool but that is likely to lead to a new crop of setups.