The Dow, the S&P 500, and Russell 2000 (IWM) finished in positive territory as money rotated out of the Nasdaq and Nasdaq 100/Invesco (QQQ) . Breadth was close to even, but it was strength in Walmart (WMT) and Microsoft (MSFT) that did the heavy lifting Thursday. Both companies are said to be interested in a deal to buy TikTok.
The wild momentum in Tesla (TSLA) continued, which helped the bullish cause, but many small stocks were roiled by the surprise of a new rapid Covid-19 test by Abbott (ABT) . Testing stocks and other stocks that are working on Covid treatments were dumped aggressively. There was some movement into the "reopen" stocks, but it was mostly value groups like the financials that benefited from the rotation.
Most notable for aggressive traders is how speculative trading in lower-priced stocks has dried up. The small caps have been much tougher and biotechnology has now been in a downtrend for a month. It isn't terrible action, but it is much more mixed and it is easy to be caught by surprise when momentum quickly fades.
I raised some cash primarily due to taking stops in some weaker positions. While the indexes continue to look quite good, I'm concerned about the trading in the individual stocks that I watch. It may just be a transition to a new crop of leaders, but it has been messy and requires some extra effort to avoid problems.
Have a good evening. I'll see you tomorrow
(MSFT and ABT are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.)
