During much of the market uptrend of the last few years the gains were primarily driven by the FAANG stocks. They would push up the indices, even when the majority of stocks were doing little. If the FAANG names were eliminated from the indices there would be negligible gains.
The FAANGs also led to the downside, which caused much of the unpleasantness that occurred during the fourth quarter of 2018. They have now come full circle, however, and are showing exceptional relative strength Monday while the broader market is mixed. The Nasdaq 100 is trading nearly 1% higher due to the FAANG names while the DJIA is up just 0.16%.
If you are a contrarian investor you might argue that the return of FAANG leadership is a negative. However, it is likely a natural consequence of the renewed dovishness of the Fed and the fact that many market players fear missing out on further gains. When you are a big fund and worried about putting capital to work, the easiest thing to do is buy the FAANG stocks. That may seem overly simplistic, but it has worked very well for a very long time.
Breadth in the market has improved nicely from early levels when it was negative and there seems to be a certain level of complacency again. This action is very similar to what we experienced for so long during the last couple years. While the bears are snarling about all the negatives, the market just keeps working higher with the FAANG names leading.
Perhaps this is the setup for an eventual disaster, but the buyers aren't worried right now and the bears have had no luck trying to call a turn. Stay focused on reacting to price action rather than anticipating what might happen.