After an intraday dip on Wednesday that was completely reversed and led to some frothy action into the close, the market action is much more mixed this morning. Breadth is running about 3 gainers for every 4 losers and pockets have slowed a bit. The FAANG stocks continue to lead but the highly speculative groups like EV and SPACs are choppier. My list of stocks that are up over 10% so far today ha shrunk substantially from the last couple of days.
Because the market has been nearly straight up recently, it is very easy to read too much into some relatively mild weakness. There is no reason to believe that this is a top rather than just some healthy profit taking. We'll watch the price action and see if we start getting some lower lows and failed bounces but overall action continues to be quite healthy.
I am maintaining the index shorts that I mentioned starting yesterday but would only add on a weak close. I continue to aggressively trade individual stocks like Virgin Galactic Holdings (SPCE) which is breaking out of a solid base on good volume, and Graf Industries (GRAF) which is finalizing a merger deal.
Precious metals continue to act well but I've taken some profits in the sector and will look to remount on pullbacks. I sold down a variety of positions yesterday and have taken a more defensive stance but I'm trying to stay aggressive with trades that are working.