It has been an enormous week for the market, and I am exhausted and heading out a bit early to rejoice my son’s 16th birthday.
The S&P 500 and Russell 2000 ETF (IWM) have been up daily this week and hit new all-time highs however what was most notable in regards to the motion have been the stellar shares. If you happen to have been in the appropriate names in the appropriate sector, then you definately loved some great features.
The constructive motion was triggered largely by the reversal of the social media-driven brief squeeze in quite a few ‘junk’ shares. There have been some reverberations however, after a quick attempt to squeeze silver (SLV) and silver miners, it got here to a swift finish. There was nonetheless a lot discuss in regards to the energy of the coordinated motion by tens of millions of small traders, however it shifted again to long-side trades.
The principle group that benefited this week from aggressive buying and selling by small traders have been hashish shares. I mentioned one of my favorites verses a lower-priced name on thestreet.com, here. It would not harm that there are rising expectations that the Senate could ultimately act on a legalization invoice.
Along with the pot names, SPAC, small biotechnology, bitcoin-related, and a mish-mash of lower-priced shares carried out properly. The decrease the value, the extra curiosity there appears to be among the many social media merchants.
The million-dollar query is whether or not this motion will proceed subsequent week. Some pundits will inform us that it has already gone too far and is unsustainable, however these of us have already confirmed they could not time the closing bell.
There are two issues driving this motion: a excessive degree of liquidity and intense curiosity in particular person inventory choosing. Earnings, economics, information headlines, technical circumstances, and valuations are just about irrelevant proper now.
This may not final ceaselessly, however I plan on sticking with the development till the bitter finish. I plan on shedding some cash when the flip does come, however there shall be an enormous cushion of income to stop a lot injury.
Have a terrific weekend. I will see you on Monday.
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