Big cap technology stocks are leading the market higher again on narrow breadth. Last week it was Apple (AAPL) and Tesla (TSLA) that were leading the Nasdaq 100 (QQQ) . Tesla is helping the bullish cause again today but there are more names like Salesforce.com (CRM) , Coupa Software (COUP) , ServiceNow (NOW) , and Workday (WDAY) breaking out.
Breadth is running about 3200 advancers to 3850 decliners which is remarkably weak for a market with the Nasdaq up 0.7%. Also, there are only around 350 stocks hitting new 12-month highs but the highs that are occurring are very strong technical breakouts.
There is plenty of chasing of the strength which is an indication that Fear of Missing Out (FOMO) is in overdrive again.
We had some similar narrow action last week and many market pessimists viewed it as unhealthy and a harbinger of danger ahead. They were proven wrong again. The market is doing fine dealing with this narrowness and is seeing enough rotation to keep the indices at highs. Weak strength is preventing many stocks from being overbought and that is a market positive.
I've been getting some money to work on an incremental basis in names like Inseego (INSG) , Lithium Americas (LAC) , and Ocular (OCUL) , but the smaller cap stock picking is not as robust as the big-cap technology names.
The action may feel frothy in some areas but don't rush to be negative. It has a tendency to last longer than many think it will.