The senior indexes finished the day with some minor losses, but it was an impressive showing by the bulls. At the opening bell, it looked like the bears were in a good position to create a little downside momentum. The news flow was gloomy and there was even a blow-up in a hot cloud name. With the indexes a bit extended, it was nearly the perfect condition for some selling to accelerate, but that isn't what happened.
The dip buyers were a bit hesitant at first, but the opening lows held and that attracted more buying as the day progressed. Stock pickers focused on small caps and that helped the Russell 2000 exchange-traded fund (IWM) to produce very good relative strength with a gain of over 1%. The Nasdaq lagged as the FATMAAN tech stocks were mixed, but by the close breadth was close to even and there were some impressive pockets of strength.
What is most notable about this action is that the negative narrative is not taking hold. Market players are still buying stocks based on fundamentals and technical patterns and aren't being scared away by negative headlines about Covid, the economy, or political chaos.
With action like this, it can be quite tempting to try to predict when the bears will eventually gain some traction, but the smart move is to stay with the positive price action and focus on those stocks that are performing best. Build that cushion of profits now so you will be in position to withstand the tougher trading environment that will occur sooner or later.
Have a good evening. I'll see you tomorrow.