The indices are struggling today and breadth is more than 2 to 1 negative but what is most interesting about the action is the pockets of speculative interest.
There has been talk that the coronavirus crisis and the number of people sitting at home looking for something to do has spawned increased interest in day trading. In addition, the lack of sports gambling has likely attracted some folks that are looking for 'action'.
Whether or not this is positive or negative can be debated but what is interesting for traders is the increased movement in some of these secondary stocks. A good example is the small-cap gambling names that I discussed here on May 12. Both Esports Entertainment Group (GMBL) and GAN, Ltd. (GAN) have jumped sharply higher and are seeing a high degree of volatility in the last couple of weeks.
There are many other secondary stocks seeing similar movement which obviously has little to do with the overall market. Whether this is a theme that will continue we will have to see but it does help to improve overall market sentiment and is part of the reason that the current move higher has been so well sustained.
Another group that is perking up today is gold and silver. I mentioned this sector yesterday but it fizzled late in the day. Precious metals tend to trade differently than most equities but it is pretty clear there is strong underlying strength. My top technical buy today was Pan American Silver (PAAS) which is breaking to its highest levels since 2011.
President Trump is scheduled to speak later today about China and that is causing some market pressure, but Fed Head Jerome Powell is once again promising to do whatever it takes to help the economy.
It is a very mixed market right now and the potential for rotation and increased volatility is high. The return of day traders brings back memories of some of past bull markets but they never end well.