1. Low Quality Leading Rally 

Crossing Wall Street 

Eddy Elfenbein on February 8th, 2021 at 11:53 am

One of the factors that is used to dissect the market is “quality.” Analysts like to see if high-quality stocks are leading the charge, or if they’re being left behind. That’s assumed to be a good indicator of what investors are thinking.

At the outbreak of the coronavirus, investors flocked to high quality names. That makes sense. But since May, high quality has lagged. Actually, it’s lagged pretty badly.

Here’s a chart of Fidelity’s Quality ETF divided by the S&P 500.

1. U.S. 30 Year Treasury Approaching 2%

30 Year Treasury ..2% on Horizon..See red 200 day moving average turning upwards

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1.Micro Cap Stocks Leading Market.

IWC Microcap ETF 50day thru 200 day to upside….+20 YTD

1.A clear sign of an options mania

Jason Goepfert-Sentiment Trader

It’s a mania. There’s no other word for it, at least in the options market.

Speculative trading picked up last June, lasted through July, then exploded in August, preceding a 13%+ correction in many of the most active names in September. This go-round, it picked up in November, eased a bit in December, now has exploded again as we enter February.

It’s occurred to such a degree it defies explanation, with record speculative activity among the smallest of traders. The 4-week sum has gone parabolic again.

Last week alone, the smallest of options traders increased the pace of their call buying dramatically. Overall volumes increased, but call buying overwhelmed put buying. 

1. Post Election Feb. History