The week started with another gap-up open, but the S&P 500 stayed pinned in a tight trading range most of the day. There was some wild speculative trading in electric vehicle names such as AYRO (AYRO) , Blink Charging (BLNK) and Solo (SOLO) , but the momentum-chasing cooled a bit in the afternoon.
It has been quite a run with the Nasdaq up five days in a row to a new all-time high, so some slowing in the buying isn't a big surprise. What is most notable is the strong underlying support and breadth of about five gainers to every two decliners. There might be some profit-taking, but there isn't any rush to liquidate positions at this point.
Generally, the folks who are selling are doing so, because they are afraid that things are a little frothy and they want to buy back lower. These aren't bears who are looking for a market collapse. These are opportunistic traders who are looking for better entry points after harvesting some good gains.
The easy thing to do at this point is to keep on trying to anticipate a market top. The harder, and more rewarding thing to do, is to keep digging for speculative trades and then manage them tightly. This continues to be a market for stock pickers rather than market timers.
Some market pundits view the aggressive speculative trading as a contrary indicator that signals that undisciplined traders are growing overconfident. That may be the case, but there is still plenty of movement for nimble traders to navigate. As long as you understand that momentum can cut both ways, there is no reason to be overly negative just because traders are feeling confident and acting aggressively.
Have a good evening. I'll see you tomorrow.