While the vote counting drama plays out, market players are embracing a bullish narrative that goes like this: Gridlock in Washington will require a less contentious political environment and will keep spending under control and prevent major tax hikes. Continuation of huge Fed liquidity, the possibility of a smaller fiscal stimulus bill, and a Covid vaccine.
The bullish narrative is particularly effective because the general view is that stocks are not overpriced and that the economic recovery will pick up steam.
That is what is driving the action and what we are seeing is a scramble to add long exposure. Groups that have struggled like SPACs, precious metals, gambling, biotechnology, etc., are seeing active stock pickers at work. They aren't just dumping money into ETFs and indices but are looking to pick stocks so they can produce some relative outperformance.
Breadth is running around 5900 gainers to 1300 decliners. New 12-month highs have expanded to over 400 and the momentum is running over those that have been trying to catch a top.
Some of the top plays on my screens that I have highlighted recently are Pacific Ethanol (PEIX) , Big Five Sports (BGFV) , GrowGeneration (GRWG) , Beem Global (BEEM) , NIO (NIO) , Nautilis (NLS) , Xeris (XERS) , Kinross Gold (KGC) , and Trulieve Cannabis (TCNNF) .
