It was a solid day of gains for the indexes, but it lacked speculative energy. With the Nasdaq 100 up 2% and the S&P 500 hitting a new all-time high, it is hard to complain about the action, but the wild momentum that was in play earlier this year has not yet returned.
Breadth was good at around three gainers for every two decliners, and there were nearly 1,000 stocks hitting new 12-month highs but there few "hot" pockets of crazy momentum. What was driving the action Monday was primarily the FATMAAN stocks. Apple (AAPL) gained 2.5%, and Alphabet (GOOG) jumped a healthy 4%. Movement like that in a few big-cap names offsets mediocre action in hundreds of smaller names.
The question we have to ponder is whether this shift back to big-cap, institutional favorites is a sign that the small retail investor has left the market. There is a definite slowing in the trading driven by social media, but is that because it has been a tough slog for the last six weeks or because liquidity has dried up?
I don't know the answer to that question. We just have to watch to see how the speculative small caps behave as we head into earnings season.
The good news is that the market uptrend is back on track. The bad news is that small speculative traders are lagging.
Have a good evening. I'll see you tomorrow.