Traders have been anticipating some traditional holiday trading but it looks like they have used up much of their energy over the last two days. The indices are lackluster and breadth is poor with just 2550 gainers to 4550 decliners. The number of stocks hitting new 12-month highs have dropped from around 1000 yesterday to just 170 this morning.
There are a few pockets of momentum in some junk China names and SPACs like Fisker (FSR) but my list of stocks up more than 10% is quite short with around 20 names.
The primary problem is that there was just too much wild speculative action on Monday and Tuesday. The trading was very similar to what we expect to see on Wednesday and Friday but it was anticipated and fed on itself. Many traders are happy to lock in gains and start to enjoy the holiday early.
Bitcoin (GBTC) remains very hot and looks to be sucking up some of the speculative flow, and some of the cannabis names like Village Farms (VFF) and Trulieve (TCNNF) are looking good but it very narrow and there is some selling into the strength.
I am going to continue to watch to see what develops. One stock I'm starting to rebuild at this point is an old favorite Aurinia Pharmaceuticals (AUPH) . It is expecting FDA approval in January and I believe that news should start to generate some positive anticipation in December.
Another name I'm continuing to accumulate is Nano Dimension (NNDM) . This is still mainly a story stock at this point but there is a high level of interest and it is forming a cup-and-handle setup. A move over the $5.50 should trigger some strong momentum.