The S&P 500 closed roughly where it opened, but it was a choppy day of trading with a positive bias. Small caps continued to outperform, which is reflected in breadth of around 5,000 advancers and 2,350 decliners, as well in the number of new 12-month highs, which exceeded 1,000.
The frothiness of the action was very apparent in cryptocurrencies, as bitcoin went parabolic and exceeded $23,500, before pulling back later in the day. Some crazy target prices are being thrown around and that just feeds the feeling that the market is becoming overheated.
One of the hottest group Thursday was the gambling group and related special purpose acquisition companies. The SPAC group has been all over the board recently, but the traders have not given up on them. The big-cap growth names and FATMAAN stocks are holding up, but they don't have the momentum we are seeing in other places.
Friday is "quadruple witching" day, so there will be some options-related action, but also Tesla (TSLA) is being added to the S&P 500 at the close and that means that everything else will have to be reduced slightly to make room for it. This is well anticipated and the index funds around have strategies for the changes, but it will still likely cause some volatility into the close.
This market is becoming more challenging to trade and triple witching and indexing games Firday will likely make it even more difficult, but sentiment is extremely strong and there is a good likelihood we see the long-lost fiscal stimulus deal fairly soon.
Have a good evening. I'll see you tomorrow.