After the chaotic trading action on Tuesday, the market returned to some good, old-fashioned small-cap momentum. After a nervous start and early pressure on big-cap technology, traders stepped-up and started putting money back to work. Many of the names that were dumped in a panic on Tuesday morning were chased higher on Wednesday afternoon. Bitcoin and its related names came roaring back, and the list of 10% movers improved nicely. By the end of the day, breadth was 5,800 gainers to 1,900 decliners, and there were close to 1,000 new 12-month highs.
One of the most interesting developments was that late in the day, the "junk" names that were the subject of a monumental squeeze three weeks ago suddenly came to life again. Names such as GameStop (GME) , AMC (AMC) , Koss Corp. (KOSS) , and Blackberry (BB) suddenly jumped, and momentum chasers like me piled on.
There was no news to account for the sudden move. Traders have been biding their time watching these names and were ready to jump in at the first sign of renewed momentum. Once GME cleared its 50-day simple moving average, it was an easy technical buy.
It will be interesting now to see if these squeeze plays have some sustained momentum. There aren't nearly as many shorts to squeeze at this point, but that may be more than offset by the eagerness of social media buyers.
After two days of correction, it feels like the market is right back where it was. I'm sure the market timing bears and pontificating experts will soon be telling us again how we are doomed.
As I wrote this morning, stock picking is back. That will be my focus again tomorrow.
Have a good evening. I'll see you tomorrow.