Mike Santoli’s market notes: Small traders feeling strong again as bitcoin jumps, Coinbase debuts

Published Wed, Apr 14 20211:30 PM EDT

This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. The market remains unflappable. It simply cannot be flapped so far—no matter how much arm-waving some skeptics do about long-term rally targets reached, complacent sentiment and uneven participation among the broad list of stocks. The month so far in the S & P 500 has been a gap-and-grind. The jump the Monday after the good jobs report, then an uphill trudge fed by a revival of "profitable mega-cap growth" stocks and elegant rotation among sizes, styles and sectors. Aside from a general willingness of investors to allow equity risk exposure to drift higher given upbeat fundamental outlooks and loose financial conditions, there is a more structural driver of the slow upside bias—clusters of options positions that help keep the S & P quietly firm, up to a certain level and until expiration this Friday. Each of the past three months we had rallies in the first part of the month and then little shakeouts in the latter part. Not saying it's a sure pattern to repeat, but worth keeping in mind. Much talk (including here) of some resemblances to the early-2018 period: steep melt-up after a massive one-year rally, lofty sentiment readings, universal certainty about a surge in earnings/gross domestic product, steep valuations, bond yields seen headed higher. Difference, though, is we got a sharp acceleration into the January 2018 peak—not quite seeing that now. And back then it had been a year of super-low volatility: VIX got under 10. We've only just now clicked down toward a lower-volatility climate (perhaps). Still, folks are pretty blissed-out and heavily loaded with stocks. Mentioned yesterday there was some rekindling of the YOLO retail trade emerging, as small traders start to feel smart, potent and interested again with bitcoin ramping and COIN about to list. Today GME and AMC bouncing (some GME debt-paydown news but that's likely just an excuse). But it's still tentative/spotty. PLTR , DASH soft. COIN will become the preferred equity vehicle for people looking to play the meta-theme of crypto maturation, the way NFLX was for streaming, TSLA was for EVs, BYND was for alt-meat. That means valuation will get distorted by all the concentrated excitement. As it happens today, the other shadow-bitcoin plays are getting hit as COIN becomes the more direct option: RIOT , SQ , MSTR , TSLA down. Mixed response to bank earnings, par for the course. JPM good numbers but some stock give-back with less room for immediate leverage to a booming economy. GS able to bounce on great cap markets and the stock having come in. WFC a turnaround story playing out. No major read on earnings reactions generally. But if they're all weaker by week's end, it could be ammo for those saying the S & P looks a bit toppy. It's a strong-breadth/small-cap-outperformance day, as the rotation between smalls and megas continues. Small-cap indexes still working a few percent below all-time highs, still something to prove here. Yields quiet, credit trading firm, VIX hovering under 17—restrained by the calm tape, but perkier than the flat indexes might suggest, given folks watching the small-caps and speculative stuff jump around, and maybe finally drawing some hedgers.

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This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics.

The market remains unflappable. It simply cannot be flapped so far—no matter how much arm-waving some skeptics do about long-term rally targets reached, complacent sentiment and uneven participation among the broad list of stocks.