Top 10 Report – January 6, 2020

Market Insight

The market’s action last Friday was rather outstanding, especially given the negative headlines and sharp sell off in the equity futures just prior to the opening bell.

The NASDAQ, S&P 500 and DOW all closed at new all-time highs last Thursday and the pulled back in a constructive manner last Friday. The Russell 2000 continued its pattern of higher highs last week, although as it pulled back to its 23-EMA at the end of last week, its pattern started to become wide and loose, which is less than ideal. The distribution count stands at 2 days on the NASDAQ and 3 days on the NYSE, which is 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. No significant rotation has taken place over the last few weeks, 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.

Continue to keep track of the strongest stocks in the strongest groups, with the best fundamentals. Focus 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 its pattern of higher highs last week and despite last Friday’s negative headlines and wild volatility, it bounced at its 10-DMA and closed well above the 9,000 level, which is constructive.

The Russell 2000 has drifted in to its 23-EMA over the last weeks or so, which is constructive, although its price action over the prior two sessions became wide and loose, which is less than ideal.

The S&P 500 continued its pattern of higher highs last week and despite last Friday’s negative headlines and wild volatility, it bounced at its 10-DMA and finished the session in the upper half of its range for the day, which is constructive.

The DOW continued its pattern of higher highs last week and despite last Friday’s negative headlines and wild volatility, it shook out below its 10-DMA and finished the session in the upper half of its range for the day, which is constructive.



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January 6, 2020