It was another day of upbeat trading with the “meme stocks” leading the action. AMC Entertainment (AMC) was particularly fascinating, with a gain of 33% move on more than 670 million shares. There are some traders who believe the company has fundamentals to justify the valuation, but most of the money in this stock is just a straight gamble by traders who are focused on emotions and psychology.
The senior indexes were close to flat, but under the surface, breadth was perky, with more than twice as many advancers than decliners. New highs expanded as well, and we finished the day with more than 450. This positive action was reflected in the Russell 2000 exchange-traded fund (IWM) , which managed a gain of 1.35% and is trading higher after the closing bell.
Much of the action is in the stocks that traders were aggressively trading back in January and early February. It was an exceptionally good trading environment back then, and the similarity is causing some excitement. It doesn’t hurt that we have some classic holiday trading taking place as well.
Volume is likely to drop tomorrow as some market players wrap up early and hit the exits for a long weekend. That could trigger a little profit-taking, but the good news is that we have some solid support, and there is likely to be dip-buying interest in speculative names that have started to run away to the upside. A lot of folks missed their entries and are now stalking some better price points
This has been a nice change for speculative traders and stock pickers, but the chances of some increased volatility are high.
Have a good evening. I’ll see you tomorrow.