As is so often the case with the market, selling and rotational action are reversing quite quickly. After lagging for three days, Nasdaq 100 ETF (QQQ) is leading with a gain of 1.87%. Other indices and sectors are not seeing the outflows you'd expect if rotation was reversing. There is broad strength with breadth of 5300 gainers to 1850 declines.
While breadth is very good, it isn't flowing into the speculative names today. There are only about 110 stocks at new 12-month highs and my list of stocks moving more than 10% is quite short. The aggressive day-trading has cooled and it appears that they may be a bit tired after trying to navigate some of the volatility recently.
After the sort of late selling that we saw yesterday, it is not unusual to see overly aggressive bears find themselves trapped when downside momentum doesn't develop. It is very easy to be squeezed when there is an abrupt reversal back up and that also produces some 'fear of missing out' among bulls that were quick to take some defensive action.
My top play on the cannabis sector, Trulieve Cannabis (TCNNF) , had a great earnings report and is hitting new highs. It has become quite extended lately, but the valuation is still attractive with 47% EPS growth expected in 2021 and a trailing PE of just 13. I'll be looking for opportunities to accumulate this name further. The CEO announced she will be appearing on CNBC's Fast Money this evening.
Another core holding on my radar today is Personalis (PSNL) . The company priced a secondary offering at $19 and has been unable to hold that level so far. It had a great earnings report last week with 23% revenue growth and strong guidance. I'll be accumulating this as it develops further.