Tuesday morning the market is providing a good illustration of the old saying "the trend is your friend."
The S&P 500 gapped up to start the morning and is now making a new intraday high on solid breadth of about 4,400 gainers to 2,400 decliners. Small-caps are lagging and I don't see much new to buy right now, which is worrisome, although the buyers don't seem to want to leave.
The S&P 500 is now up six of the last seven days and is at its highest point since Oct. 10, 2018. I doubt that anyone was predicting this sort of action back in December and that is part of the reason that many think you should be extremely cautious. If you listen to the very intelligent pundits, you are foolish to trust the trend and should be rushing to sell in order to prepare for the disaster that awaits the naïve bulls.
Maybe, but it generally is better to focus on making money while you can and then become more cautious when the price action shifts. There is still plenty of positive price action on my screens.
StoneCo Ltd. (STNE) is leading the charge following a solid earnings report. Recent Stock of the Week, Pyxus International (PYX) continues to run to new recent highs. Biotechnology play Axsome Therapeutics (AXSM) is up for the twelfth straight day and even all the FAANG names are up again.
I'm not finding much new to buy Tuesday morning but I did start a position in a small biotechnology name Assertio Therapeutics (ASRT) which is supposed to earn $0.83 per share in 2019 and $0.89 in 2020 and trades with a P/E of 4 according to MarketSmith. I don't know the story but with those numbers and a solid base it looks like it could have some support.
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