The senior indices are in positive territory Tuesday morning, but under the surface there is a vicious rotation as traders take profits in recent leaders in small-caps, SPACs and other momentum groups, and the money rotates back into the "safety" of the well-known growth names. The FATMAAN stocks are all in positive territory while a broad swath of the rest of the market is acting poorly.
Breadth is about 2 to 1 overall, although the number of new 12-month highs has contracted to around 370 and my scan of stocks that are up more than 10% is the shortest it has been in weeks with less than 20 names. Some of the pullbacks in big recent gainers are quite sharp.
I suspect that this movement is going to create a good opportunity but we still have two more days of the end-of-the-year games to contend with. There have been some big drops in previous years when the calendar rolls over and we seeing signs of it now.
I've tightened stops and have been a heavy net seller so far Tuesday morning as I protect gains the best I can. I will jump in on some longs sooner or later, however, right now my focus is defense and keeping accounts close to highs.