Top 10 Report – January 13, 2020

Market Insight

The strength and constructive action across the general market indexes continued throughout last week.

The NASDAQ, S&P 500 and DOW all made new all-time highs last Friday, but backed off before the close and finished the session in the red. The Russell 2000 fell 0.37% on heavier volume, but found support at its 23-EMA, which is a positive.

Volume declined on the NASDAQ and NYSE last Friday, so further distribution was avoided. The distribution count now stands at 2 days on both major exchanges, which is considered low and not at all a concern.

The uptrend in the general market continues to be well supported by a broad base of healthy leadership. Also, significant rotation of any sort has yet to take place, so all the leading sectors and industry groups we’ve been discussing remain in play. They were the technology, medical/biotech, retail, building, financial and transportation sectors.

As long as there are constructive setups forming across the market’s broad-based leadership, pullbacks will likely be shallow and short-lived and can be used as buying opportunities.

However, this does not mean we should ignore the fact that the general market is currently extended above its short-term moving averages. Not to mention, the Put/Call Ratio and VIX Index are at levels where corrections often occur.

Nevertheless, continue to keep track of the strongest stocks in the strongest groups, with the best fundamentals. Stay focused on the very best of the best and wait for the perfect entry to develop. Set your alerts and be ready to buy these stocks as entry areas present themselves.

The Indicies

The NASDAQ continued to make constructive progress higher last week and despite the recent negative headlines and wild volatility, it finished the week just slightly below recent all-time highs.

The Russell 2000 pulled back to its 23-EMA in a constructive manner last week and is currently trading just slightly below its recent highs.

The S&P 500 continued to make constructive progress higher last week and despite the recent negative headlines and wild volatility, it finished the week just slightly below recent all-time highs.

The DOW continued to make constructive progress higher last week and despite the recent negative headlines and wild volatility, it finished the week just slightly below recent all-time highs.



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January 13, 2020

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