Meme Mess Mucks Up Market
It was a messy day for the market as the frothy meme trading reversed to the downside, but the major indexes bounced after a gap-down open, as breadth declined. Traders continued to chase some stock picks, but they dumped the crazy meme names that were flying higher yesterday.
The meme trading is a distraction for much of the market, and it was a relief to see it lose some of its luster, but talk about the Fed unloading some of its bond-buying and concerns that a hot jobs report in the morning will cause inflation fears to erupt again kept more serious big-cap buyers sidelined.
There was some decent stock-picking action, but it was narrow, and plenty of names drifted lower on a lack of interest. Electric vehicles saw some strength, and there was some focus on short-squeeze plays, but there were not many standout themes.
This is the second time this year when meme trading caused a disruption in broader market action. It came to an abrupt end last time, but the potential for rotational action increases.
All eyes will be on the jobs report in the morning. A hot report combined with the Fed's plan to begin unloading some bonds is unlikely to be market-friendly. The focus on meme trading caused a distraction, but not that the momentum there has slowed the market will be looking harder for the next catalyst.
Have a good evening. I'll see you tomorrow.
At the time of publication, DePorre had no position in any security mentioned.