Some market pessimists were looking for the splits of Apple (AAPL) and Tesla (TSLA) to act as catalysts for a market reversal. The logic was that the market has been growing increasingly narrow, stocks are becoming increasingly extended, and volatility indexes are rising.
It is a good argument, but it isn't working.
Overall market momentum continued, with Apple helping to pave the way. Tesla took a rest, but it was replaced by a slew of other momentum names such as Zoom Video (ZM) , DocuSign (DOCU) , Zscaler (ZS) , CrowdStrike (CRWD) , and Peloton (PTON) .
Breadth also expanded, but it is still quite sedate with around 4,300 gainers to 3,000 decliners but there were nearly 550 stocks hitting new 12-month highs so there were plenty of pockets of momentum.
What is most notable about the market action is that the warning signs just aren't working. New stocks are leading and there is a shift to momentum chasing of higher-priced stocks. Low priced stocks are not working as well and there is some sector weakness, such as in cannabis and biotechnology.
One of the hot sectors right now is the electric vehicle special purpose acquisition company names such as Tortoise Acquisition (SHLL) , Workhorse (WKHS) , and Graf Industries (GRAF) . Stock picking is working well, but it has shifted and is narrower.
There isn't much to do here, but to stick with the trend and to keep looking for the stocks that are working. The warning signs are not working and the market is finding new ways to keep running higher.
Have a good evening. I'll see you tomorrow