Top 10 Report – September 25, 2019

Market Insight

Good Morning,

The major indexes pulled back sharply on heavier volume across the board yesterday. The weakness came on news that House Speaker, Nancy Pelosi decided to begin a “formal impeachment inquiry” on President Trump. The NASDAQ finished the session back below it 50-DMA, although the other three major indexes closed above.

The distribution count now stands at 4 days on both major indexes, not to mention, we saw a huge spike in volatility yesterday. Hence, the current uptrend can be considered back under pressure.

Fortunately, the market’s broad-based leadership is still good shape. However, if leading growth stocks started to break down in earnest from here and the distribution days continued to pile up, that would be cause for concern.

As we’ve been discussing, extreme volatility has made progress very difficult and yesterday’s action was clear evidence of that. So, continue to be very selective and scale in slowly, but only if progress is being made.

Also, always remember that there is nothing wrong with sitting on the sidelines, in cash and waiting for a more favorable environment to develop.


The Indicies

The NASDAQ dropped 1.46% on heavier volume, closed below its 50-DMA and added a fourth day of distribution to its count, which is less than ideal.

The Russell 2000 plummeted 1.58% on heavier volume and closed near its low for the day, although it managed to close above its 50-DMA which is a positive.

The S&P 500 fell 0.84% on heavier volume, but closed above its 50-DMA, although it still added a fourth distribution day to its count, which is less than ideal.

The DOW fell 0.53% on heavier volume, but finished the session above its 50-DMA, which is a plus.

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September 25, 2019