For the second day in a row, market players were surprised when the market saw a big gap at the open. This time the gap was to the upside and was accelerated when retail sales numbers came in substantially higher than expectations.
2020 has been a remarkable year in many respects but it has been particularly remarkable for the number of extremely poor economic forecasts. Not only have the predictions about the Covid-19 crisis been wrong but economists haven't even come close on predictions about jobs, retails sales and economic growth.
The inability to produce predictions that are even close to reality is one of the big reasons the market continues to act in such surprising ways. Market players constantly have to adjust as their expectations shift when the news turns out to be quite different than was anticipated.
There is plenty of poor positioning again today but there was some early hesitation to chase. Bears are wishing and hoping and praying for a 'sell the news' reaction to Jerome Powell who is expounding in a virtual conference right now about Fed policy and projections. So far there is little reaction to what he is saying.
Breadth is running about 6300 gainers to 830 losers. There are now notable pockets of weakness. Strength is very broad and not concentrated as market players anxiously look for something that isn't too extended that they can buy.
I've done a little selling into strength but the big problem at this point is trying to put more cash to work at prudent entry points. I'm letting some of the winners like Ocular (OCUL) , Datadog (DDOG) , Power REIT (PW) , Forum Merger (FMCI) , and GAN, Ltd. (GAN) .
One new position I added to today is Digital Turbine (APPS) .
We are starting to see some selling pick up as I write and we are now under the opening lows. I expect those that have been missing out to be lurking not too far under the surface.