The indices were already set up for a 'sell the news' reaction to the fiscal stimulus deal and following the index rebalancing on Friday, but the headlines about a new strain of Covid in Europe is what triggered the selling. There was some quick dip-buying right at the open that was shot down quickly but buyers are trying again to put some support under the indices.
Breadth is running about 1400 gainers to 6000 decliners but there still are around 150 new 12-month highs and my list of stocks that are up more than 10% is fairly long. There is some rotational out of the 'reopen the economy' stocks and back into the 'stay at home' names.
I'm impressed with some of the speculative support in the SPAC names but the cannabis stocks are being hit pretty hard. The FATMAAN names are all red and even Zoom (ZM) , the 'go-to' stay-at-home play isn't doing much. Silver (SLV) is doing well but gold (GLD) is sluggish. Bitcoin (GBTC) seems to have developed a reputation as a safe haven and seems to be replacing gold to some extent.
My Stock of the Week is RenaSola (SOL) and is moving very well so far today following news of some contract wins in Poland. I continue to like Pacific Ethanol (PEIX) as a Covid play on medical-grade alcohol. It announced that it is paying off some high-interest rate debt this morning.
Overall I'm seeing some continued interest in stock picking and not much panic. Traders are still trying to find places to put money to work but are more tentative than they have been. At this point, I'm optimistic that support levels will form fairly fast and I'll be looking for buys.
