The action started slowly, but the early bounce held, and that attracted more interest as "fear of missing out" started to build. In recent years, V-shaped bounces have become the norm, and after the pounding the DJIA took yesterday, you do have to wonder if it can happen again.
Breadth has steadily improved and is now around 4 to 1 positive after a 2 to 1 start. We only have 87 new highs, but the news lows have dropped down to 85. There are a few more pockets of strong momentum, but overall it remains sedate. The S&P 500 is working hard to fill Monday's gap and is almost there.
I've added to a few positions and am eyeing the cannabis sector for bounces. It has been one of the laggards as it saw a "sell the news" reaction to cannabis legislation, but the fundamentals are only improving. I've added to Cresco Labs (CRLBF) and will start to nibble at some of the other multi-state operator (MSO) plays if they hold for another day or two.
Meanwhile, there is some good bottoming action in small-caps, and I'm growing more confident that the sector has bottomed as we head into earnings. I added to my old favorite Xeris Pharmaceuticals (XERS) today and also to my Stock of the Week, Performant Financial Corporation (PFMT) , which is developing very nicely.
This market has had these very vigorous jumps after a sharp drop in recent years, and it is very easy to underestimate how far they will go. With earnings season coming up, the trading is looking much better.
