The major indexes aren't doing much, and the action in the cryptocurrency market is quite poor, but traders are celebrating the return of some great stock picking. The Russell 2000 exchange-traded fund (IWM) is leading for the second day, with a gain of around 1%, and that is reflected in breadth, which is running about 4,700 advancers to 3,100 decliners. There are nearly 850 names hitting new 12-month highs.
What is most notable about this market right now is that there is some great movement in individual stocks. It is much broader than just the meme names that are seeing much coverage in the media. Biotechnology and special purpose acquisition companies -- or SPACs, which were in a miserable bear market for a few months starting in February -- have to find sustained interest and the pockets of hot momentum continue to build.
My list of stocks that are up more than 10% is too long to count and is the longest it has been in a while. Many of the stocks are seeing a boost because of the Russell indexes' rebalancing that I have been discussing, but there is also just some good trading action in charts that are set up well.
We saw some similar action back in February that become too frothy, but traders don't seem to be as overconfident this time. Many were burned badly over the last few months, and they don't want to make the same mistake again. There is a bit of a "Wall of Worry" feel to the action as the cryptocurrencies offer a good illustration of what can happen in the hot speculative sectors.
There often is a temptation to try to call a top into this sort of action, but traders are still looking for names that aren't too extended and are having some success, so I expect them to stick around.