Markets finished at session highs as they remain stubborn to give much of the gains they have enjoyed since the early February lows. Energy and materials continue to lead the way and one has to begin to accept that these laggards are starting to be rotated into. We speak of risk on with the Nasdaq when it outperforms but the “risk on” trade can we referred to in several different fashions. We now see the commodity plays attempting to solidify a bottoming process. Beaten up steel and copper plays like X and FCX relished Wednesday with big double digit percentage gains. There are better behaving stocks in the group which we would prefer to play like NUE which lies 17% off recent 52 week highs compared to X which resides 59% off its own 52 week highs (buy strength). Of course oil has made a decent rebound from lows in the mid to upper 20s. Copper has made a series of higher highs and higher lows. Is this an indication that inflation will be to pick up? One can be sure the Fed is watching intently. Yet another lens to view the “risk on” trade is through the health of the junk bond market. Before todays inside day the JNK would have been on a 12 session winning streak if not for the 4 penny loss on 2/23. Volume was significant both Monday and Tuesday as as trade both instances was more than double the average daily. Perhaps one can view risk on with the beaten biotech’s names mounting a comeback. Below is the chart of CLVS that we highlighted in our Tuesday Game Plan. It sprinted higher by 8% Wednesday and is now up 14% from the recommended trigger.

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