The markets were mixed and uncertain on Monday, which was a good setup for a strong move here on Tuesday. All it took was a questionable catalyst in the form of a possible deal on border security. It is still unclear if that deal will happen, but market players were not well-positioned for upside on Tuesday morning and now they are scrambling to put some cash to work.
As I mentioned in my first post of the day, cash levels are very high and we have good conditions for "climbing the wall of worry" action. The bear case is very easy to make, which is one of the big reasons that cash levels are so high, but the potential of good news on China or the border is going to bring in buyers.
Breadth is extremely strong here on Tuesday with around 5,300 gainers to 1,400 decliners. There are still only around 100 new 12-month highs, which tells us how far we are from last year's high, but the momentum in FAANG names, pot stocks and other groups is very strong.
My top pot play, Pyxus International Inc. (PYX) , which was my Stock of the Week last week, is up 16% on Tuesday morning following a solid earnings report Monday night. This stock has no analyst coverage and the story is still not very well-known. I am looking for it to continue to trend higher.
The uptrend off the Dec. 24 lows paused last week and that is exactly what was needed to set up some good charts. For example, Qutoutiao Inc. (QTT) , which I mentioned last week on slight weakness, is making a run at recent highs. Corbus Pharmaceuticals Holdings Inc. (CRBP) is a nice-looking chart that I added here on Tuesday in anticipation of a move through overhead at $8.
The phrase is used incorrectly and far too often, but this is a stock pickers' market right now. The wall of worry is working and the charts are looking good.