Yesterday was another strong outing for the stock market, made even more impressive with mega growth stocks pulling back and buyers seeking to stay in the mix rather than heading for the hills.

For all the talk about equities being the only place to be, billions of dollars have found a home in other assets. It may seem like half the cash that’s poured into stocks has mostly gone into a few names. That’s a little exaggerated, but only a little.

Rotation moved vertically and horizontally, as microcaps and small-caps in the Russell 2000 outperformed again. But the NASDAQ Composite saw its highest tally in the plus column for 2021 at 813 with average gains of 20.3%.

Energy continues on its fantastic run, completely belying the notion that President Biden would destroy the industry. Or maybe not? 

Regulators Always Help the Perps

We have seen this movie before. We’ve seen it with the Dodd-Frank Act and the clampdown on new banks. The rest is too big to fail, and it only got much bigger, as big names picked up market share and others rolled into each other in a wave of consolidation.

One result has been a gigantic spread between what it cost banks to borrow and how much they charge to lend. There are other issues for would-be borrowers as well. It just doesn’t make sense. Everything Washington, D.C. intervenes in, we get less competition.

The Oil Trade is Gushing

The war on oil is only going to send oil prices higher, and maybe that’s by design. It’s easier to sell the solar and wind dream when oil prices are through the roof.  We need energy to power the nation, which means taking children to school or grandma to the emergency room. Yesterday’s options activity for

Exxon Mobil (XOM) was tops in the entire market:

• Calls: 1,085,333
• Puts: 77,813

Portfolio Review

We took a lot of action in the model portfolio, including jettisoning a couple of laggards for fresh powder and new ideas.

Today's Session

U.S. small business optimism fell in January for third consecutive month. The index stood at 95, down from 95.9 in December and below consensus 96.5. The jobs layoffs and turnover number (JOLTS) numbers will come at 10:00 AM ET.

The major indices are mixed this morning, but all are now in the red after multiple up days and record highs.