Market players were caught by surprise with the fury of the early buying Monday. A big part of what is driving this action is poor positioning.
Since the lows in March there has been a constant battle between those that think the market is not reflecting the economic challenges that lie ahead and those that believe the Fed will deal with any and all weakness. So far the "don't fight the Fed" bulls are winning the battle.
Despite the strong open the S&P 500 was not able to move past recent highs at around 2950. That is the top of the recent trading range but the attack on that level is a little too "V-ish" and it may require some basing action for a breakout move to gain some momentum.
Breadth is running 6,500 gainers to 800 decliners, which is about as lopsided as it gets. There are 165 new 12-month highs and pockets of momentum in groups such as biotechnology and technology continue. It is still a stock-pickers market but the highly correlated action is a sign that this is index driven more than anything else.
Some individual names on my screens are acting well such as Power REIT (PW) , Esports Entertainment Group (GMBL) but the "stay-at-home" plays like Chewy (CHWY) and Slack (WORK) are struggling. I don't believe the stay-at-home theme is dead but it may need to reset at this point.
My Stock of the Week is a 5G play, Inseego Corp. (INSG) , which is also a stay-at-home play to some degree but it should see robust growth in the second half of the year regardless of what happens with Covid-19.