Top 10 Report – January 15, 2020

Market Insight

The NASDAQ and S&P 500 made new all-time highs yesterday, but sold off a bit towards the end of the session and finished the day just slightly in the red. The DOW also made a new all-time high and pulled back towards the end of the day, but ended the session higher. However, the DOW closed in the lower half of its range for the day, which is considered distributive action.

The small-cap Russell 2000 clearly exhibited the most strength yesterday. It finished the session higher and in the upper half of its range for the day, which is healthy and constructive. Also, the distribution count remains 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. As long as a healthy rotational process remains in place and constructive setups continue to develop 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 has been riding up its short-term 4-EMA over the last couple weeks and finished yesterday’s session just slightly below its new all-time high from earlier in the day.

The Russell 2000 rose 0.37% on heavier volume and closed in the upper half of its range for the day, as the small-cap index clearly outperformed the other major indexes yesterday.

The S&P 500 has been riding up its short-term 4-EMA and 10-DMA over the last couple weeks and finished yesterday’s session just slightly below its new all-time high from earlier in the day.

The DOW has been riding up its short-term 4-EMA and 10-DMA over the last couple weeks and finished yesterday’s session just slightly below its new all-time high from earlier in the day.



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January 15, 2020