Materials (XLB) continued to gain traction yesterday, leading all sectors, as Energy (XLE) gave back its Maduro bounce.

Beyond Picks & Shovels

But the most remarkable story continues to be memory and storage. The picks & shovels phase of the artificial intelligence (AI) “Gold Rush” has been so successful that the storage phase has caught many folks off guard.

The stock market knew this, which is why so many of the biggest winners last year were storage and memory stocks that enjoyed one-year rallies rarely seen in the stock market's history. Yet, few “experts” discussed this as a potential bottleneck.

Oddly, it was not that long ago that everyone had written off SanDisk (SNDK) and Western Digital Corp (WDC). Now, they are juggernauts that many think can keep surging for the rest of the year. But not at 27% a day.

Solid market breadth.

Once again, small-caps looked great, particularly value, core, and revenue.

Historically, when the first five days of January are higher, the market enjoys substantial gains for the year.