Top 10 Report – January 22, 2020

Market Insight

The NASDAQ, S&P 500 and DOW pulled back yesterday, although not by much. All three major indexes finished the session slightly below recent all-time highs and are still well extended above their short-term moving averages.

The small-cap Russell 2000 pulled back to logical support from its recent high over the last couple days and continues to look healthy and constructive. The distribution count remains low on both major exchanges and is not at all a concern.

The uptrend in the general market continues to be well supported by a broad base of healthy leadership, which is the single most important factor regarding the sustainability of the general market’s trend.

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 fell 0.19%, found support at its 4-EMA and closed just a hair below its recent all-time high from the session prior.

The Russell 2000 sold off over the prior two sessions, but halted its decline at logical support, right above its recent prior highs, which is constructive.

The S&P 500 fell 0.27%, found support at its 4-EMA and closed just a hair below its recent all-time high from the session prior.

The DOW fell 0.52% yesterday, but found support at its 4-EMA and closed just slightly below its recent all-time high from the session prior.



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January 22, 2020