The Nasdaq 100 (QQQ) continues to lead the market higher as buyers focus on names such as Apple (AAPL) , Alphabet (GOOGL) , and Amazon (AMZN) . Breadth is running much better than Tuesday but the price action in small-cap stocks continues to lack energy. There are only a dozen or so names up more than 10% and the only theme that is really working is big cap technology.
There is some minor interest in cannabis names on talk that a legalization bill will be introduced soon but it is far from passage and there are many obstacles to overcome. This is helping to put a bid under the stocks in the sector but, like most small-caps, there just isn't any energetic buying.
I see quite a few names I like that are slow fading due to disinterest in small-caps. Many have solid fundamentals but it just doesn't matter right now because the price action is poor and buyers are burned by the recent failure of dip buying.
A good example of a name I like that is acting poorly right now is Ammo, Inc. (POWW) . The company is doing everything right fundamentally, has increased guidance, and has terrific growth but the price action is poor and the stock is drifting down to support at its 50-day moving average. While it looks like a great value, the price action undermines the fundamental argument for now.
A "good" stock in the wrong sector is going to have problems and right now small-caps is the wrong sector.
The market is waiting for Jerome Powell to appear but for now it seems to be optimistic that the message that inflation is "transitory" will prevail.