For the third Monday in a row, the market opened significantly higher on news of treatment for a new vaccine for Covid-19. On both of the last two Monday's the high of the weak was hit shortly after the open which makes it very likely that traders are once again looking for some sort of 'sell the news' reaction.
In both of the prior cases, the vaccine news triggered some strong rotational action. We are starting to see that already as the FATMAAN have rolled over and the Nasdaq 100 (QQQ) is barely positive, while the DJIA is hanging on to an 0.8% gain.
Most notably breadth is running 5500 gainers to 1680 decliners and there are over 400 new 12-month highs. This is a continuation of the very strong speculative action that I mentioned numbers of times last week. The hot money is flowing into individual stocks like Beem Global (BEEM) , Snap (SNAP) , EOS Energy (EOSE) , Big Five (BGFV) , Village Farms (VFF) , etc.
The stock picking is exceptionally strong and has little correlation with the indices. It is a very unusual environment since some of the market is focused on reacting to vaccine news and is seeing a rotation, while another part of the market is pure speculative trading and is moving purely on price action.
There is some very frothy action out there but traders are on a tear and are willing to chase some thin small-caps very aggressively.