The weak close on Wednesday set up favorable conditions for some downside follow-through Thursday, although active traders continue to provide good support. They still continue to embrace the negative narrative about Covid in the short term.
Breadth is running a little weak with around 3,300 gainers to 3,950 decliners and less than 100 stocks hitting new 12-month highs. But there continues to be "hot pockets" of action that are helping to keep sentiment positive. When the traders stop chasing hot stocks such as Arcimoto (FUV) and CIIG Merger (CIIC) then it will be time to worry about a deeper correction.
While we continue to have rotational action it's shifting gears regularly. The Nasdaq 100 ETF (QQQ) is leading with a gain of 0.4% so far while the DJIA and banks are in the red. It has not been a smooth transition between "reopening" stocks and "stay-at-home" stocks because there still is little clarity about how Covid will impact the economy over the next few months.
This is still a stock-pickers market although it is narrower. Some of the positive action on my screens is in Futu Holdings (FUTU) , Westwater Resources (WWR) , Big 5 Sporting Goods (BGFV) , Nano Dimension (NNDM) , Personalis (PSNL) , EOS Energy Enterprises (EOSE) , and InMode (INMD) .
There are some good charts out there and positive price action and that is sufficient reason to stay bullish. I will continue to look for opportunities to put cash to work.
I'm dealing with a case of Covid so I'm moving a little slower than normal, however, I still see no reason to be negative about the market action.