We start the week with some selling into the gap-up open. Breadth started at around 4 to 1 positive and is fading a little, but we already have around 750 stocks at new 12-month highs. Meme trading remains active, and cryptocurrencies have bounced back nicely, but the S&P 500 is trading straight down from the open.
The biggest negative is that bonds are weak as inflationary fears are bubbling up again. The 20+ Year Treasury Bond Fund (TLT) is breaking below its 50-day SMA again, and that seems to be driving the pressure on the indices. It doesn't help that CNBC is reporting that President Biden is looking to make a capital gain tax increase retroactive.
It is mixed action, but there is still interest in stock picking. The key is to find the sectors that are working the best. If bonds continue to struggle, that is going to be a headwind, but there are market players that want to trade, and they are willing to chase things like AMC (AMC) and GameStop (GME) just to stay active.