The big news for the market this week was the better action in growth stocks and speculative small-caps.
The "meme" names came alive again, with AMC Entertainment (AMC) leading the action. That action spilled over into some of the speculative names, but it didn't do much to help cryptocurrencies, which fell apart again after a bounce attempt. The cryptos have had some rough trading during recent weekends, so that will be interesting to watch while equity markets are closed for three days.
Some of the positive action this week was due in part to the "holding trading" phenomenon where individual traders gravitate toward faster-moving speculative names, but some of it was also due to a reversal of the vicious rotational action out of growth and into value that has been causing substantial problems for traders since mid-February.
The market has had a recent change in character that is rewarding stock-picking again, but will it continue? I suspect that we will see better stock-picking, but it will be more selective and lack the wild positive momentum that occurred early in the year. The best approach will be to identify some new trading themes as they start to gain some traction.
Many traders were hit hard by the bear market action in certain stocks over the last few months. However, there is some clear bottoming action now and plenty of room to the upside. We could use a little more choppiness to set up some charts, but this is the best-looking trading action since mid-February.
Enjoy the holiday. I'll see you on Tuesday.
