From the End of the World to Frenzied FOMO

There is a frenzy of buying Wednesday morning as the Trump administration continues to talk about easing tariffs on China and pushing for negotiations. Vietnam has announced that it is now in talks with the U.S., and the mood is now quite optimistic and hopeful. Treasury Secretary Bessent is currently speaking and apparently saying all the right things, such as "America First doesn't mean America alone."

The historic levels of positive breadth that occurred on Tuesday continue Wednesday with about eight advancers for each decliner. There still are only about 100 names hitting new 12-month highs because the indexes are still far below their highs, but there are only 20 new lows.

This sort of action is a product of poorly positioned investors combined with fear of missing out. On Monday, it looked like the world was about to end, so it's not too surprising that investors were extremely cautious. Now, they are afraid that they have missed the turning point and don't want to miss a massive rally on positive trade and tariff news.

There are still plenty of things that can go wrong, and there is still great concern about economic health, but it does feel like the lows have now been set, and we are in the process of trying to engineer a new uptrend.

I made a number of partial sales Wednesday morning in a few names such as Uber UBER, ADMA Biologics ADMA, and BridgeBio Pharma BBIO because I already am overweight, but I will be quick to remount as conditions develop.

When markets make this sort of transition, the focus generally turns to stock picking. Investors want to find the great values that were created by broad selling. Downtrends are mainly about trading the volatility on the index level, while uptrends are more about finding individual stocks and themes that will outperform. I'm on the hunt for some new ideas.

At the time of publication, Rev Shark was long UBER, ADMA and BBIO.