Top 10 Report – October 21, 2019

Market Insight

The NASDAQ and S&P 500 struggled to make progress last week, each adding another distribution day last Friday, which is not constructive. The distribution count now stands at 8 days on the S&P 500 and 7 days on the NASDAQ, which is on the high side.

Nevertheless, all the major indexes finished the week back above all of their moving averages, even the small-cap Russell 2000.

More importantly, as heavy pressure remains on many names in the software sector, the number of constructive bases forming in the retail, medial/biotech, building/related, semiconductor and other technology groups continues to expand. This is what healthy rotation among the market’s leadership looks like.

So, continue to keep track of the strongest stocks in the strongest groups, with superior fundamentals. Set your alerts and be ready to initiate some long exposure, as entry areas present themselves.

The Indicies

The NASDAQ continued making progress towards all-time highs last week, although it added further distribution along the way, which is not constructive.

The small-cap Russell 2000 powered through significant resistance last week and finally closed back above all of its moving averages, although it continues to lag the other major indexes.

The S&P 500 continued making progress towards all-time highs last week, although it added further distribution along the way, which is not constructive.

The DOW made progress towards all-time highs last week, although its bearish pattern of higher volume downside days and lower volume upside days continues.



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October 20, 2019

Discussion

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