Stocks traded strongly most of the day, but there was some program selling late in the day that hit big caps and caused the S&P 500 to close at the lows of the day with a minor gain of just 0.10%. Smaller stocks were mostly unaffected with the Russell 2000 fund (IWM) finishing near the highs of the day with a gain of 0.87%.
Breadth was good at more than two-to-one positive, the number of stocks hitting new 12-month highs expanded to around $740, and the number of stocks on my screens that moved 10% or more Wednesday is too long to count. In other words, "Big Mo" is still in town and enjoying the party.
Special purpose acquisition companies acted beastly again with Citron Research igniting a frenzy with a recommendation of XL Fleet (XL) , which finished the day with a gain of 85%. Traders scooped up several sympathy plays such as Northern Genesis (NGA) , GigCapital3 (GIK) , and Forum Merger III (FIII) .
The pockets of momentum in small caps are still operating without regard to the news flow or the action in the big-cap names. It is a very interesting disconnect, but it makes for some exciting trading for aggressive traders.
Thursday the market closes at 1 p.m. ET for Christmas Eve. Will traders continue this hunt for moving momentum players or will they be looking to lock in some big recent gains and take a rest. Quite a few of us wouldn't mind rest, but the market seldom makes it easy for us.
Trading in front of a holiday typically has a positive bias as most folks are in a good mood and looking forward to a break, but the small-cap action has been so hot this week that many traders are growing nervous. This sort of thing just doesn't last for long.
Have a good evening. I'll see you in the morning.