Some of the rotation that drove the market higher Wednesday is cooling off but a return to FAANG and growth names is providing underlying support. As is typical lately, there were plenty of eager buyers on early weakness and now the "fear of missing out" is sucking in more buyers who were thinking that maybe, just maybe, the market could see some downside.
Breadth is running about 2 to 1 negative mostly due to small-cap weakness, although there are still plenty of single-digit stocks attracting speculative interest. The influx of new traders in recent weeks is making the small-cap speculation a regular thing. The crowd of rookies is looking hard for the next big mover and they often make it self-fulfilling to a great degree. Genius Brands International (GNUS) and Dolphin Entertainment (DLPN) are two good examples.
I have some smaller trades going but have found the rotational and choppiness to be challenging. One trade I'm adding to is the bitcoin ETF, Grayscale Bitcoin Trust (GBTC) , which shook out break-out buyers on a quick drop Tuesday but continues to produce a good-looking technical setup.
Precious metals have pulled back sharply in the last couple of days and seem to be finding some support now. I'll be watching to re-establish some positions as they develop from here.
The odd thing about this market is that while many are growing weary of trying to navigate the never-ending uptrend they are afraid that they will miss out if they relent in their pursuit of more buys.
This market makes entry points extremely difficult, but standing aside seems to carry a very high opportunity cost.
