A market that can produce 5 to 2 positive breadth while all seven of the FATMAAN stocks are trading in negative territory is very bullish. It would be better if there was more volume but it is very impressive that stocks do not need the leadership of these institutional favorites to keep running higher.
Too often in recent years we have seen the illusion of bullish action because a small group of stocks were driving the indices. We have just the opposite now as stocks are moving on their positive merits while the more expensive and expensive big-cap names are ignored.
The small caps have been so strong that some rest is needed but there is nothing in this action that suggests that this is toppy or dangerous action. For much of the rally off the March lows, there were constant warnings about the narrowness of the action but that cycle has now turned and we have just the opposite.
I continue to stay intently focused on stock picking. I've taken some partial profits in a few places after strong moves and am not seeing as many setups right now but I'm going to keep digging. My goal is to always keep accounts as close to highs as possible and that requires locking in gains periodically so they don't slip away.
One interesting development is the rotational action that is taking place within the smaller caps. SPACs were red hot a couple of weeks ago but now the group has become poison. Even the announcement of what sounds like a solid deal by Social Capital III (IPOC) , in the Medicare advantage area is seeing an aggressive 'sell the news' reaction. The electric vehicle sector has also cooled but interest in anything battery-related has picked up. Secondary plays like Westwater Resources (WWR) and CBAK Energy Technologies (CBAT) are attracting a high level of speculative interest.