After last week's market celebration stocks took a rest Monday. The screens were bright red with around 2,100 gainers to over 5,400 losers, but the big-cap technology names enjoyed some relative strength and the FATMAAN names came back from some early pressure.
The best part of the market recently has been the speculative trading in special purpose acquisition companies, electric vehicles, cannabis, and a few other hot sectors. There was some profit-taking in the speculative names, but strength in bitcoin and some related names helped to keep the speculative sentiment positive. The hot money traders weren't exchanging high fives like they did last week, but the overall price action was not bad.
The issue now is whether this was just some healthy profit-taking after some exuberant holiday trading or was this a sign that the hot money is ready to cool off a bit. We don't have enough information yet to conclude but, there appears to be a lot of liquidity still looking for a place to go. Some pullbacks Monday simply will make for better charts.
We kick off the new month in the morning, and that usually means some inflows, but we also have some big initial public offerings and secondaries on the horizon that are going to sop up some excess cash. Traders still have an appetite for stocks, the price action is good and technical action is positive. There isn't any reason to be a bear at this point.
Have a good evening. I'll see you tomorrow.