All the attention earlier in the year was on the momentum wreck and accompanying divergences from the broader indices. How long we asked, could the “cool kid stocks” bleed before that spilled over to the Chevron’s and Colgate’s of the world? We now see that this sort of behavior, like every other anomaly, can persist for longer than most think possible. Look at the damage that was done in some of the sweetheart names.
Just a few months later, we are seeing the exact opposite. These momentum names have regained their luster and some stocks on the list are looking like they want to take out prior highs. Like we have seen all year, the indices are grinding higher and continue to have zero concern over what the high beta names are doing. Look at how these have snapped back from their recent lows.
One thing that is not following suit is the talk surrounding this price action. If the momentum wreck was going to end the party, surely the re-ignition of these stocks should be the fuel that sends this market higher. If X+Y=Z, then Y=Z-X, be fair.