It is one of those days with solid gains and strong breadth but not a lot of energy. Market players are trying to put some cash to work but they aren't concerned enough to aggressively chase. They are inching in and keeping a bid under the action but the trade news uncertainty is tempering the enthusiasm.
What is particularly interesting about the market action today is that it playing out in a very logical fashion. We had the much anticipated pullback that provided better technical conditions and now the bounce which the bulls are hoping will carry into the end of the year.
Seldom does that market act in such a reasonable and logical way. It is highly likely that this will be a set up for another bout of volatility. The most likely catalyst will be news about whether tariffs go into effect on December 15 as planned. If they are delayed there will be another celebration about a trade deal. If they do go into effect then the negotiation process will likely drag out into next year.
Keep in mind that much of the trading in December is driven by tax planning and widow dressing. There will be some trading that will have nothing to do with news flow or fundamentals.
The biggest positive I see right now is that individual stock picking is improving. There is quite a bit of positive action in biotechnology names on my screen today like Relmada Therapeutics (RLMD) , Aimmune Therapeutics (AIMT) , Eloxx Pharmaceuticals (ELOX) , and Baudax Biotech (BXRX) , etc.
Yesterday's technical buy Enphase Energy (ENPH) in the solar sector is seeing good follow-through as well.
While the tone of the action isn't widely euphoric, the excellent stock picking bodes well for further gains.
