The speculative buying that took hold last week is continuing Monday morning but traders are starting to look a little tired.
Shares of airlines, cruise ships, small-cap oils and some low-priced "junk" continue to attract interest from the new crop of day traders that has been driving volume to record levels, although the action is narrowing.
The FAANG names are struggling but so are banks (BKX) as bonds are turning back up. Breadth is still good at 5,600 gainers to 1,650 decliners but the number of new 12-month lows is back down to around 130 and the pockets of momentum are not quite as emphatic.
There is still strong interest in stock-picking and I'm seeing good action in stocks with good setups and relative strength. A few examples on my screens right now are Zynex (ZYXI) , Sea Limited (SE) , Datadog (DDOG) , and Myovant Sciences (MYOV) .
Meanwhile, many traders are stalking a reversal in the indices. They are hopeful as the indices start to reverse and fill the opening gap. Still, it is very easy to overlook how aggressive the dip buyers can be on pullbacks near the highs.
A weak close will be the key sign that a change in character might be coming but until then the focus remains on stock-picking.
