It was another topsy-turvy day of action with all the major indexes in the red and breadth running 3,100 gainers to 4,400 decliners. Despite the generally weak action, there were more wild short-squeezes and some strong action in electric vehicle-related special purpose acquisition companies.
There was another long list of small stocks making big moves, but these were all "secondary" names. The traditional momentum and CANSLIM names lagged, while aggressive traders chase wild momentum in things like GameStop (GME) and WorkHorse (WKHS) .
This action is causing some great concern among old-time Wall Street pundits, while the young traders are going wild with some of the junk that they can move. It won't last forever, but it has already lasted longer than many thought possible.
After the close, Microsoft (MSFT) put up a very solid report and is trading up 6%. This is going to help the FATMAAN names, and it will be interesting to see the market reaction. So far, neither good nor bad earnings have had much impact on either individual stocks or the market. The focus has been on this crazy speculative action, and there are no signs of it shifting.
There is no way to know how long this theme of strong small-cap speculation and short squeezes will continue, but I have no interest in fighting it. If you can't beat them, then join them. Sometimes the best move is to run with the ignorant herd of trades rather than try to fade them.
Microsoft is a good sign for this market and may trigger some rotation as we head into a big day or reports on Wednesday. This is an unusual mix of action, and there are plenty of opportunities.
Have a good evening. I'll see you tomorrow.