After days of dreary action, the speculative stocks suddenly came alive.
The action came after small-caps and growth stocks had been struggling while the indexes trended higher on poor breadth. I had thought that I might have an opportunity to attend to some other matters while stocks languished, but we ended up with some of the best trading action under the surface in a while. Not only did the smaller and speculative stocks do well, but the crypto-related names were hot, too.
My list of stocks up more than 10% was the longest it has been in weeks, breadth was solid at 5,500 gainers to 2,500 losers, and the Russell 2000 exchange-traded fund (IWM) outperformed substantially with a gain of 1.8%. The senior indexes showed gains, but the FATMAAN names lagged as money rotated into the laggards that I like to trade.
The big question now is whether we will see some follow-through. The last couple of times we have had this sort of rotational action, it has fizzled out quickly, and money quickly rotated into the "safe haven" big caps and indexes. The beaten-down names just have not developed any sustained upside, although many are still substantially under the highs they hit months ago.
While this trading action was much better today, traders need to stay on their toes and not be overly confident about upside momentum. This market still has much to prove, and seasonality isn't going to help.
Have a good evening. I'll see you tomorrow.