The big-cap technology stocks are back on track Wednesday morning after a one-day pause. All of the FATMAAN stocks are in the green after they all traded down on Wednesday. It shows how the market action is being driven primarily by rotational moves right now. These stocks are moving in tandem and not based on their individual merits.
Breadth is quite good at around 2 to 1 positive and that is reflected in small cap (IWM) and Nasdaq 100 (QQQ) strength There are 150 new highs, which is fairly mild. I'm seeing some continued weakness in biotechnology, which seems to be due to pricing pressures on drugs.
What continues to be most fascinating about this market is the pockets of wild speculative trading. Eastman Kodak (KODK) has turned into a super-momentum stock after President Trump discussed its move into providing pharmaceutical chemicals. The stock has gone from $2.62 at the close on Monday and hit $60 as there has been numerous circuit breakers in the wild trading.
This sort of trading is a study in human emotions. It has nothing to do with valuation at this point but is tantamount to a Ponzi scheme. All that matters to traders is whether other traders will continue to push it higher.
I'm maintaining a small position in KODK and will let it run, but it is far too distracting to trade actively if you are trying to manage other positions as well.
Another day-trading name that is popping up on my radar right now is XpresSpa Group (XSPA) , which offers airport-based Covid-19 testing sites.
While it continues to be a market for stock-picking watch for a pause in the action Wednesday afternoon when the Fed issues its policy statement.