The market is constantly undergoing changes but the speed and intensity of the changes that have occurred so far in 2020 will not be soon forgotten.

The year started with a continuation of the long-run uptrend. The bears were predicting again that a day of reckoning was fast approaching but no one predicted the events that would unfold.

After ignoring the raging coronavirus in China and Asia, the market finally reacted and went into free fall at the end of February and continued to drop for about a month. This was unlike any event any investors had seen in their lifetimes and there was widespread concern that the impact would linger for many months if not years.

The pandemic led to the most aggressive monetary and fiscal stimulus ever seen. Traders quickly embraced the 'don't fight the Fed mantra' but many technical traders were convinced there would be a retest of the lows rather than a V-shaped bounce. A parade of billionaires, including Warren Buffett, announced their doubts about the short term health of the market.

Not only did the market continue to climb higher but the intensity of the rise surprised many bulls. Trying to keep track with the one-sided action became nearly impossible and led to widespread Fear of Missing Out (FOMO).

In recent weeks, the market has undergone rotation action that allowed all the lagging groups such as banks, airlines, oil, industrials, and other value stocks play catch-up with FAANGs, biotechnology, semiconductors, technology and growth stocks in general.

A further wrinkle in the action has been a surge in speculative trading. Much of this has been attributed to Robinhood where many young investors and traders have become interested in aggressive day trading of speculative stocks. The action has been so great that it has led to record-setting volume as some low-priced names, that are nearly bankrupt, have traded hundreds of millions of shares.

The indices are now at their highest point since February and the depths of the 'bear market' looks like it is long gone.

So what is next? I'm not going to try to answer that question. Anyone foolish enough to even try that at the beginning of the year would not only be wrong but would look ridiculous for even trying.

What I do know is that the market's next step is likely going to surprise a great number of people. My plan is to keep on trading the price action in front of us but to be ready to shift very fast when the next stage of this evolution begins. We don't need to predict what will happen, we just need to be ready to embrace the change quickly as it occurs.

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The Market Evolution in 2020 Has Been Remarkable but It's Far From Over - TheStreet