Top 10 Report – February 19, 2020

Market Insight

Little has changed since the last report. The major indexes have continued to march higher, with the NASDAQ and S&P 500 leading the way and the distribution count remains at manageable levels.

A broad base of leading growth stocks has continued to lead the market higher, which is the most important factor regarding the sustainability of the general market uptrend. However, many of these names have already broken out through their proper entry areas where risk/reward is optimal and are now extended, at least in the near-term.

Regardless, as long as enough sound setups continue to develop across the market’s broad-based leadership to maintain a healthy rotational process, constructive weakness can be used to continue to further accumulate shares.

So, continue to pay close attention to how rotation takes shape and focus on the strongest names in the strongest groups, with the best fundamentals. These are the stocks you ultimately want to be concentrated in.

Keep your emotions in check, stick to your rules and your plan and wait for the perfect setup and entry to develop, or do not trade. Remember, “buying right” is your best defense.

The Indicies

The NASDAQ has continued to defy gravity and ride up its short-term 4-EMA since it gapped up to new all time highs 10 days ago and continues to hold up in a tight range just a hair below recent all-time highs, in a display of constructive strength.

The small-cap Russell 2000 has continued to make constructive progress higher with the other major indexes, although it continues to lag well below its prior all-time high from 8/31/18.

The S&P 500 has continued to defy gravity and ride up its short-term 4-EMA since it broke out to new all time highs 8 days ago and continues to hold up in a tight range just a hair below recent all-time highs, in a display of constructive strength.

The DOW  made new all-time highs just four sessions prior and has since drifted into its 21-DMA on below average volume, where it continues to look healthy and constructive.



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February 19, 2020