Many market players have been growing nervous lately, as an extremely nasty election approaches, Congress fails to pass a stimulus bill, unemployment concerns build, and even the president shows he's not immune to Covid-19 as the pandemic rages on.
The irony of the stock market is that the obviousness of these worries is probably much of the reason for why the market saw such a powerful rally Monday. Not only did the indexes manage powerful gains, but breadth was stellar with close to 6,000 gainers to 1,500 decliners.
Once again astute stock picking was well rewarded. There were some sizable gains in stocks related to lithium mining, select biotechs did well, the FATMAAN technology names were solid, and a variety of the stock picks I've been highlighting for weeks performed very well.
Not only was the price action quite positive, but it helped to produce a much healthier technical pattern for the S&P 500, which bounced almost perfectly off its 50-day simple moving average.
One negative was that volume was quite light in many places. There was obviously a lot of incorrect positioning, but there was not a rush to load up at this point.
Market players seem to be realizing that the news headlines don't matter much when it comes to navigating this market. There are plenty of stocks that are doing well on their individual merits and that is good news for stock pickers.
Small caps -- per the Russel 2000 fund (IWM) -- are outperforming, which is further evidence that this is a market for stock pickers. The stock picking bulls have the momentum and our primary task is to try to stay with it the best we can.
Have a good evening. I'll see you tomorrow.