Month: October 2020

Helmets Ready

BUYER’S EDGE

For the week, there little to suggest this bull market is done. Pullbacks on lighter volume across the sectors is exactly what buyers want to see. 

Election is a week from Tuesday. Get your helmets ready, there’s no telling what bombs may go off as politics heats up. 

Breadth and thrust trends remain Bullish.

Weekly Advancing/Declining Volume	NYSE: 1.3, NASDAQ: 1.2
Accumulation/Distribution Count, 20 Days	S&P 500: 5/4, NASDAQ: 3/2
Weekly Advances/Declines, Issues	NYSE: 1.2, NASDAQ: 0.9
New Highs	NYSE: 200 (-35%), NASDAQ: 245 (-37%)
New Lows	NYSE: 76 (+27%), NASDAQ: 120 (+46%)

TOP DOWN, SECTOR PRICE ACTION & NEWS ANALYSIS

ETF	NAME	% CHG	40WEMA	CHART
XLC	Communication Services Sector	2.19		Trend up. 5% off 52-wk high.
XLU	Utilities Sector	1.17		Trend up. 10% off 52-wk high.
XLF	Financial Sector	1.04		Rangebound. 24% off 52-wk high.
XLE	Energy Sector	0.66		Downtrend. 25% off 52-wk low.
XLY	Consumer Discretionary Sector	0.09		Pullback. 2% off 52-wk high.
XLV	Health Care Sector	-0.09		Pullback. 2% off 52-wk high.
XLB	Materials Sector	-0.41		Pullback. 2% off 52-wk high.
XLI	Industrial Sector	-0.53		Pullback. 5% off 52-wk high.
XLP	Consumer Staples Sector	-1.18		Pullback. 3% off 52-wk high.
XLRE	Real Estate Sector	-1.33		Rangebound. 30% off 52-wk low,
XLK	Technology Sector	-2.21		Pullback. 8% off 52-wk high.

Look for Financials to trend higher to validate the bull.

Higher bond yields made headlines as Financials ETF (XLF, %), as Regional Banks (KRE, Retail ETF (XRT, +8%) soared higher along with the bigger Banks (KBE, +6.43%)

JPMogan (JPM, +2.27%) is entering the mobile payments business, allowing customers to charge credit cards with a contactless reader. The space was pioneered by Square (SQ, -5.14%) and PayPal (PYPL, -0.69%), who announced it will be allowing its customers to buy and well with cryptocurrencies like bitcoin. 

A pause in Big Tech leadership threatens to pull it all down. This sector is the relative strength king since the rally off the March lows.  

The Technology (XLK, -2.21%) was the biggest losing sector of the week as Apple (AAPL, -3.34%) pulled back on lighter volume amidst uncertainty over iPhone 12 release date and earnings guidance. Microsoft (MSFT, -1.56%) trades in like fashion. 

Watch the 50-day moving averages for support, as it would be typical to see some type of high-volume battle here. 

Semiconductors (SMH, -0.10%) are holding a nice, tight pull back to its up trending 20-DMA. Strength here is always good for the market in general. 

Communication Services (XLC, +0.75%) was the strongest sector for the week. 

Facebook (FB, +7%) will report earnings Thursday, and is expected to report strong ad revenue like its peers. Meanwhile, Alphabet (GOOG, +4.32%) said it will fight back against antitrust suits filed against it in 11 states. 

Netflix (NFLX, -1.60%) added 2.2 million subscribers for the third quarter, well below the 16 million and 10 million in the first and second quarters. 

Snap (SNAP, +55%) soared above its 2017 IPO price for a base breakout on news of higher revenue. The Internet Content industry fired up over the news, with Pinterest (PINS, +20.29%), Twitter (TWTR, +10%) and Spotify (SPOT, +8%,) 

Tesla (TSLA, -4.33%) is holding its base after saying it was on target to sell half a million cars this year. The electric car maker has been profitable for five quarters in a row. Production is in the works for its self-driving taxis. 

Healthcare (XLV, -0.09%) was quiet as Biotech (IBB, -2.30%) retreated for the second week in a row. CRISPR Therapeutics (CRSP, -15.64%) had a major about face on heavy selling, no news. 

Gilead Sciences (GILD, -1.95%) hit a seven-year low as its Covid-19 treatment drug remdesivir approved by the FDA. Not good. 

GSRTRADES

These are the stocks in breakout mode that meet the strict criteria for Growth Stock Trades.

These top names are leadership and will help determine the success of others on our Bases and Lower Bases lists. Strong representation from biotech, cloud computing, stay at home, work at home, software and online retail. 

BREAKOUTS & PULLBACKS

Ticker	Company Name	Industry	GRADE	DEMAND
FOLD	Amicus Therapeutics, Inc.	Biotechnology	4X	++
EXAS	Exact Sciences Corporation	Biotechnology	2X
FVRR	Fiverr International Ltd.	Data Processing Services	3X	++
ZEN	Zendesk, Inc.	Data Processing Services	4X	++
ROKU	Roku, Inc. Class A	Electronics/Appliances	4X	++
PFSI	PennyMac Financial Services, Inc.	Finance/Rental/Leasing	1P	++
BYND	Beyond Meat, Inc.	Food: Major Diversified	2X	+
Z	Zillow Group, Inc. Class C	Information Technology Services	2X	++
SQ	Square, Inc. Class A	Information Technology Services	4P	++
NET	Cloudflare Inc Class A	Information Technology Services	4X	++
APPS	Digital Turbine, Inc.	Internet Software/Services	3P	++
SNAP	Snap, Inc. Class A	Internet Software/Services	4X	++
NVCR	NovoCure Ltd.	Medical Specialties	4P	++
ETSY	Etsy, Inc.	Miscellaneous Commercial Services	3P	++
PTON	Peloton Interactive, Inc. Class A	Other Consumer Services	1X	++
ZM	Zoom Video Communications, Inc. Class A	Packaged Software	1P	++
CRWD	CrowdStrike Holdings, Inc. Class A	Packaged Software	1X	++
DDOG	Datadog Inc Class A	Packaged Software	2P	++
VEEV	Veeva Systems Inc Class A	Packaged Software	4P	++
OKTA	Okta, Inc. Class A	Packaged Software	4X	++
TEAM	Atlassian Corp. Plc Class A	Packaged Software	4X	++
TWLO	Twilio, Inc. Class A	Packaged Software	4X	++
IIPR	Innovative Industrial Properties Inc	Real Estate Investment Trusts	1P	++
GRUB	Grubhub, Inc.	Specialty Stores	4X	+

BUYERS’ EDGE

Growth stock breakouts are sticking.

For the week, major indexes were little changed after falling back from attempts at new highs.   

Buyers remain uninspired as fear of resurgent coronavirus cases and fruitless government stimulus negotiations dominate headlines. Heavy bets on the market may be off ahead of the Presidential election in two weeks.

INDEX	WEEK CLOSE	CHANGE	WEEK %	YTD %
DJIA	28,606	19	0.1	0.2
Nasdaq	11,672	92	0.8	30.1
S&P 500	3,484	7	0.2	7.8
Russell 2000	1,634	-4	-0.2	-2.1

A Shift to small-cap stocks was evident as the Russell 2K plays catchup with major indexes. Lots of talk regarding who’s leading the election polls and what it means for the market. No need to get political here. Just observe. 

Breadth and thrust stays bullish.

	Weekly Adv/Decl Volume  NYSE: 1.1, NASDAQ: 1.1 – Bullish.
	Accum./Dist. Count – 20 Days S&P 500: 5/4, NASDAQ: 3/3
	Weekly Adv/Dec Issues NYSE: 0.6, NASDAQ: 0.9 – Slightly Bearish.
	New Highs – NYSE: 389, NASDAQ: 308 New Lows – NYSE: 60, NASDAQ: 82

Coronavirus numbers are reportedly up with 22 states hitting record of a thousand new cases. Germany, Italy and France have tightened social restrictions to fight contagion. 

The big get bigger. Layoffs in the hundreds of thousands, as well as a record amount of small business closures, tell a different story than what Wall Street earnings portray. 

Earnings boosts driven by government stimulus and a recovering economy have been cause for optimism. 

Third quarter earnings for S&P 500 companies are expected to be down 20% from a year ago. But if so, would be better than predicted earlier in the year, as well as the 30% fall in the second quarter. 

Expect growth stocks with business models that cater to stay at home at work from home to do very well, especially with the wind of a V-shaped economic recovery at their back. But keep in mind those earnings are last quarter.

Some hedge funds are reportedly shorting companies benefiting from covid closures, arguing the stay at home business has hit its peak. Ground up analysis key in this environment, watch your local cash registers.

WEEKLY SECTOR ACTION

ETF	NAME	% CHG	40WEMA	CHART
XLI	Industrial Sector Fund	1.1		New High.
XLU	Utilities Sector Fund	0.82		Right Base Forming.
XLK	Technology Sector Fund	0.78		5% Off High.
XLC	Communication Services Sector Fund	0.75		8% Off High.
XLP	Consumer Staples Sector Fund	0.65		2% Off High.
XLY	Consumer Discretionary Sector Fund	-0.35		New High.
XLB	Materials Sector Fund	-0.36		New High.
XLV	Health Care Sector Fund	-0.41		New High.
XLF	Financial Sector Fund	-0.95		Treading.
XLE	Energy Sector Fund	-1.95		24% Off Low.
XLRE	Real Estate Sector Fund	-2.22		31% Off Low.

Financials (XLF, -0.95%) struggles to stay above its 40-week moving average as the sector threatens to pull the market lower.  

It was a big news week for banks as JPMorgan Chase (JPM, +0.31%) and Citigroup (C, -3.87%) handily beat earnings expectations, though were less confident with their outlooks. 

Bank of America (BAC, -4.42%) said consumer spending for its customers was up compared to a year ago, and that credit card delinquencies were down. But Don’t be surprised to see credit defaults spike after government stimulus wears off. 

Retail (XRT, +0.44%) hit another new high since breaking out last week. Retail spending appears healthy with a 1.9% increase for the month, beating a consensus 0.8% increase. 

Technology (XLK, +.78%) threatens to slow its climb as titans Apple (AAPL, +1.75%), whose stock didn’t have much reaction to the company’s revealing of its iPhone 12, and Microsoft (MSFT, +1.78%) posted a close in retreat from its weekly and all-time high. 

Communication (XLC, +0.75%) was little changed as components Facebook (FB, +0.56%) and Alphabet (GOOG, +3.81%) , as well as Apple, face pressure from the European Union for being too powerful, and may be subject to more rules to make them more transparent with data collection.

Netflix (NFLX, -1.60%) struggled to breakout to a new high as it faces competition from Walt Disney (DIS), who said it would focus on making its growing streaming services the main part of its business. Growth stock Roku (ROKU, -0.78%) is holding a solid uptrend since breaking out of its base a month ago.  

Semiconductors (SMH, -0.10%) hit a new high as it holds leadership status with a strong uptrend. PC sales rose 14.6% for the third quarter, their highest rate in a decade as work, and stay at home trends fueled demand. 

On the cloud computing front Fastly (FSLY, -33%) dampened moods as it lost a third of its market value after announcing third quarter revenue would fall 5% short of expectations as customers, including its largest TikTok, used less of its service than expected. 

Elsewhere in the cloud industry, Cloudfare Inc. (NET, +25.76%) scorched higher as the new cloud darling, and Twilio (TWLO) bought customer data startup Segment for $3.2B. Recent IPO Snowflake (SNOW, +1.90%) struggles to rise above its open price from a month ago.  

Healthcare (XLV, -0.41%) scratched a new high before retreating as Biotech (IBB, -1.98%) closed lower for the week despite several names holding breakout form and setting up in bases. See Setups.  

Autonomous vehicles are coming closer to streets near you. Google’s Waymo said it would put driverless cars with no human backups on the streets of the Phoenix are. General Motors (GM, +4%) will be joining in after receiving a permit for California to do the same. 

GSRTRADES BREAKOUTS & PULLBACKES – These breakout stocks met the strict GSRTrades fundamental criteria and have broken out of technical bases.

Strong representation from biotech, cloud computing, stay at home, work at home, software and online retail. 

Ticker	Company Name	Industry	Grade	Demand
EXAS	Exact Sciences Corporation	Biotechnology	2X	+
FATE	Fate Therapeutics, Inc.	Biotechnology	3X	++
FOLD	Amicus Therapeutics, Inc.	Biotechnology	4X	++
INSM	Insmed Incorporated	Biotechnology	2X	++
TWST	Twist Bioscience Corp.	Biotechnology	4X	++
BPMC	Blueprint Medicines Corp.	Biotechnology	2X	+
FVRR	Fiverr International Ltd.	Data Processing Services	3X	++
TER	Teradyne, Inc.	Electronic Production Equipment	4P	+
ROKU	Roku, Inc. Class A	Electronics/Appliances	4X	++
STRL	Sterling Construction Company, Inc.	Engineering & Construction	4P
COOP	Mr. Cooper Group, Inc.	Finance/Rental/Leasing	2P	++
PFSI	PennyMac Financial Services, Inc.	Finance/Rental/Leasing	1P	++
EXPI	eXp World Holdings, Inc.	Financial Conglomerates	4P	++
BYND	Beyond Meat, Inc.	Food: Major Diversified	2X	+
FRPT	Freshpet Inc	Food: Specialty/Candy	4P	++
GRBK	Green Brick Partners, Inc.	Homebuilding	4P	++
FIVN	Five9, Inc.	Information Technology Services	4X	++
GLOB	Globant SA	Information Technology Services	4P	++
NOW	ServiceNow, Inc.	Information Technology Services	4P	++
QTWO	Q2 Holdings, Inc.	Information Technology Services	4X	+
UPLD	Upland Software, Inc.	Information Technology Services	4X
NET	Cloudflare Inc Class A	Information Technology Services	4X	++
SQ	Square, Inc. Class A	Information Technology Services	4P	++
MELI	MercadoLibre, Inc.	Internet Software/Services	4X	++
APPS	Digital Turbine, Inc.	Internet Software/Services	3P	++
FRHC	Freedom Holding Corp.	Investment Banks/Brokers	3P	++
PIPR	Piper Sandler Companies	Investment Banks/Brokers	4P
PJT	PJT Partners, Inc. Class A	Investment Banks/Brokers	4P	+
PODD	Insulet Corporation	Medical Specialties	4P	++
NVCR	NovoCure Ltd.	Medical Specialties	4P	++
PRPL	Purple Innovation, Inc.	Miscellaneous	4P	++
ETSY	Etsy, Inc.	Miscellaneous Commercial Services	3P	++
KNSL	Kinsale Capital Group, Inc.	Multi-Line Insurance	4P	++
PTON	Peloton Interactive, Inc. Class A	Other Consumer Services	1X	++
AVLR	Avalara Inc	Packaged Software	4X	++
MDB	MongoDB, Inc. Class A	Packaged Software	4X	++
OKTA	Okta, Inc. Class A	Packaged Software	4X	++
TEAM	Atlassian Corp. Plc Class A	Packaged Software	4X	++
TENB	Tenable Holdings, Inc.	Packaged Software	4X	++
ZS	Zscaler, Inc.	Packaged Software	4X	++
DDOG	Datadog Inc Class A	Packaged Software	2P	++
TWLO	Twilio, Inc. Class A	Packaged Software	4X	++
BMY	Bristol-Myers Squibb Company	Pharmaceuticals: Major	4X	+
GMRE	Global Medical REIT Inc	Real Estate Investment Trusts	4P	+
NVDA	NVIDIA Corporation	Semiconductors	4P	++
TRUP	Trupanion, Inc.	Specialty Insurance	4P	++
LOVE	Lovesac Company	Specialty Stores	4X	++

These top names serve as leadership, and will help determine the success of other potential breakouts found on our Bases and Lower Bases lists.

Keep your head clear,

Dan

Quick Take: Buyer’s Edge. Growth stock buyers on the prowl. 

President Trump’s Tweets appeared to whipsaw the market this week after he gave up support for, then backtracked on economic stimulus negotiations with congress. You must wonder how the algo traders weathered that one. 

We’re in the final weeks before the Presidential election. Expect more volatility. 

INDEX	WEEK CLOSE	CHANGE	% CHANGE	YTD %
DJIA	28586.90	904.09	3.3	0.2
Nasdaq	11579.94	504.92	4.6	29.1
S&P 500	3477.14	128.72	3.8	7.6
Russell 2000	1637.55	98.25	6.4	-1.8

Growth Stock Bias: BUYERS’ EDGE	Advances Declines For Week:NYSE 3.3, Nasdaq 3.8
Accumulation/Distribution Count For Month: S&P 500 5/5, Nasdaq 4/4	Advancing/Declining Volume For The Week:NYSE 1.9, Nasdaq 2.1

It’s unclear if the market has a preference for the negotiations to continue. As of Friday, Trump said talks are on. McConnell has said it’s unlikely any deal would be made before the election. 

The market may be more vulnerable to a contested election rather than a particular candidate winning or losing. Obama didn’t raise taxes when he took office during the financial crisis, Biden probably won’t, at first, either.

The V-shaped economic recovery is intact. The overall general data supports this. Though we’re still perhaps another year away from returning to pre-pandemic numbers as far as jobs and output. 

What we want to see as Growth Stock investors is continued earnings success from companies benefiting from the environment. Funds buy businesses, not economies.

We’re in an environment of easy money from the Fed. Buyouts and mergers in effect. The hunt for yield is being played out in stocks. 

LEADERSHIP 

SYMBOL	NAME	% CHG
XLB	Materials Sector Fund	5.07
XLE	Energy Sector Fund	5.05
XLU	Utilities Sector Fund	4.6
XLK	Technology Sector Fund	4.56
XLV	Health Care Sector Fund	4.03
XLI	Industrial Sector Fund	3.99
XLF	Financial Sector Fund	3.83
XLY	Consumer Discretionary Sector Fund	3.45
XLP	Consumer Staples Sector Fund	2.56
XLC	Communication Services Sector Fund	2.15
XLRE	Real Estate Sector Fund	1.37

Consumer Discretionary and Materials are the strongest horses in this race as they hits 52-week highs. 

Technology (XLK, +4.56%) titans Alphabet (GOOG, +3.89%), Amazon.com (AMZN, +5.17%), Apple (AAPL, +3.49%), and Facebook (FB, +1.74%) are under political pressure after a House antitrust subcommittee accused them of holding monopoly power. The group recommended separating parts of their businesses. 

Weakness from the group could weigh on this growth stock rally. Watch as these names wrestle with their 50-day moving averages, the technical outcome will be bullish looking new bases or bearish right shoulders. 

Semiconductors (SMH, +7.8%) lit it up this week as key players reported and forecasted strong sales. news that Xilinx (XLNX, +17.89%) is in talks to be acquired by AMD (AMD, +1.59%) for $30 billion.

Retail is casting a positive vote for the broader market with the S&P Retail ETF (XRT, +5.36%) breaking out to a new high. The survivors get stronger. Big Lots (BIG, +10.67%) and Lowes (LOW, +4.05%) are climbing higher as they post great sales and earnings.

Healthcare (XLV, +4.03%) is just off a new high, being led by Biotech (IBB, +6.47%) as a number of companies possessing strong fundamentals breakout of bases. They’ve been included in The Growth Stock Report for months.

The Financials ETF (XLF, +3.83%) is recovering from technical brokenness. We’d expect it to fall back into bullish form for the market to have more durable strength in the long run. 

Small caps are just shy of positive territory for the year as measured by the Russell 2000 Index. 

At some point the money will flow to value-oriented stocks – but not now. 

A sell off in the US Dollar has Gold benefiting as it looks to hold its head above an eight-year base breakout.  

Square (SQ, 10.42%), an online payment company, grabbed headlines with its $50 million, purchase of the Bitcoin currency. That’s 1% of the company’s assets. 

Bitcoin spiked 4% on the Square announcement. Speculation is more companies will invest in Bitcoin. ARK Next Generation Internet ETF (ARKW, +7.07%) bought into the Grayscale Bitcoin Trust (GBTC, +8.38%) they announced Friday. The 451, 179 shares they reported buying would be worth $5.3M at closing price Friday. 

GSRTRADES

These are the stocks in breakout mode that meet the strict criteria for Growth Stock Trades.

These top names are leadership and will help determine the success of others on our Bases and Lower Bases lists. Strong representation from biotech, cloud computing, stay at home, work at home, software and online retail. 

BREAKOUTS

Ticker	Company Name	Sector	Industry	Grade	Funds
BPMC	Blueprint Medicines Corp.	Health Technology	Biotechnology	2X	+
FATE	Fate Therapeutics, Inc.	Health Technology	Biotechnology	3X	++
INSM	Insmed Incorporated	Health Technology	Biotechnology	2X	++
RARE	Ultragenyx Pharmaceutical, Inc.	Health Technology	Biotechnology	1X	++
SGEN	Seattle Genetics, Inc.	Health Technology	Biotechnology	4.3	++
TWST	Twist Bioscience Corp.	Health Technology	Biotechnology	4.3	++
XLRN	Acceleron Pharma Inc	Health Technology	Biotechnology	2X	++
FVRR	Fiverr International Ltd.	Technology Services	Data Processing Services	3X	++
ZEN	Zendesk, Inc.	Technology Services	Data Processing Services	4.3	+
ROKU	Roku, Inc. Class A	Consumer Durables	Electronics/Appliances	4.3	++
PFSI	PennyMac Financial Services, Inc.	Finance	Finance/Rental/Leasing	1P	++
EXPI	eXp World Holdings, Inc.	Finance	Financial Conglomerates	4.1	++
BYND	Beyond Meat, Inc.	Consumer Non-Durables	Food: Major Diversified	2X	+
FRPT	Freshpet Inc	Consumer Non-Durables	Food: Specialty/Candy	4.1	++
FIVN	Five9, Inc.	Technology Services	Information Technology Services	4.3	++
FSLY	Fastly, Inc. Class A	Technology Services	Information Technology Services	4.3	++
GLOB	Globant SA	Technology Services	Information Technology Services	4.1	++
NET	Cloudflare Inc Class A	Technology Services	Information Technology Services	4.3	++
NOW	ServiceNow, Inc.	Technology Services	Information Technology Services	4.1	++
SQ	Square, Inc. Class A	Technology Services	Information Technology Services	4.1	++
APPS	Digital Turbine, Inc.	Technology Services	Internet Software/Services	3P	++
FRHC	Freedom Holding Corp.	Finance	Investment Banks/Brokers	3P	++
PIPR	Piper Sandler Companies	Finance	Investment Banks/Brokers	4.1
PJT	PJT Partners, Inc. Class A	Finance	Investment Banks/Brokers	4.1	+
CDNA	CareDx, Inc.	Health Technology	Medical Specialties	4.3	++
NVCR	NovoCure Ltd.	Health Technology	Medical Specialties	4.1	++
PODD	Insulet Corporation	Health Technology	Medical Specialties	4.1	++
PRPL	Purple Innovation, Inc.	Miscellaneous	Miscellaneous	4.1	++
ETSY	Etsy, Inc.	Commercial Services	Miscellaneous Commercial Services	3P	++
PTON	Peloton Interactive, Inc. Class A	Consumer Services	Other Consumer Services	1X	++
AVLR	Avalara Inc	Technology Services	Packaged Software	4.3	++
DDOG	Datadog Inc Class A	Technology Services	Packaged Software	2P	++
ESTC	Elastic NV	Technology Services	Packaged Software	4.3	+
OKTA	Okta, Inc. Class A	Technology Services	Packaged Software	4.3	++
TWLO	Twilio, Inc. Class A	Technology Services	Packaged Software	4.3	++
ICLR	ICON Plc	Health Technology	Pharmaceuticals: Other	4.1	+
IIPR	Innovative Industrial Properties Inc	Finance	Real Estate Investment Trusts	1P	+
TRUP	Trupanion, Inc.	Finance	Specialty Insurance	4.1	++

Picking a good stock to trade is one thing. Picking one for investment is another. The longer the hold time, the more in depth we get into the company’s business model. 

More to come,

Dan

Quick Take: Buyer’s Edge. Don’t fight a Bull, ride it.

We have a bullish Follow Through Day to hang our Viking hats on. Big buying equates to firm believing. 

Growth Stocks are alive and well in a market that sees relatively light selling in the face of all kinds of uncertainty.  The Nasdaq has posted four each of Accumulation and Distribution days over the past month. The S&P 500 has split five each. 

INDEX	WEEK CLOSE	CHANGE	% CHANGE	YTD %
DJIA	27682.81	508.85	1.9	-3.0
Nasdaq	11075.02	161.46	1.5	23.4
S&P 500	3348.42	49.96	1.5	3.6
Russell 2000	1539.30	64.39	4.4	-7.7

We’re in the final stretch to the election. President Trump and the First Lady have reportedly tested positive for the coronavirus. It’s that kind of year. 

Look for signs of who the market is voting for. Friday’s price action leaves little to grasp, and much will depend on the how well the fight between the President and the virus goes.  

Trump will portray strength. Though initial mild symptoms, as they are for most, though have been known to give way to more serious symptoms. 

The economic recovery is being judged for speed. 

A disappointing September employment report showed a slower than expected recovery process as fear of permanent job losses is increasing.

The unemployment rate dropped to 7.9% from 8.4%, but the labor force participation rate fell to 61.4% from 61.7%. Lack job growth was coupled with a lack of growth in average hourly earnings.

Job data from California was not included as it grapples with large numbers of claims and suspected fraud. A significant omission from our most populous state.

Walt Disney (DIS) is laying off 28,000 employees, and the airline industry could be announcing even more layoffs as of tomorrow without a stimulus plan.

House Speaker Pelosi and Treasury Secretary Mnuchin are still negotiating a possible stimulus plan.

Good earnings expected for the third quarter. 

The fourth quarter has historically been great for stocks. It has also marked many pivotal lows for the market. 

WEEKLY SECTOR ACTION

Nearly all sectors positive with the exception of energy as crude prices fell 8%.

Real estate and financials led the way. Not so much a growth story here as much as a rebound.

SYMBOL	NAME	% CHG
XLRE	Real Estate Sector Fund	5.08
XLF	Financial Sector Fund	3.45
XLU	Utilities Sector Fund	3.35
XLY	Consumer Discretionary Sector Fund	3.02
XLP	Consumer Staples Sector Fund	1.68
XLI	Industrial Sector Fund	1.46
XLB	Materials Sector Fund	1.34
XLV	Health Care Sector Fund	1.11
XLC	Communication Services Sector Fund	0.92
XLK	Technology Sector Fund	0.88
XLE	Energy Sector Fund	-2.88

LEADERSHIP

The tech giants leading this bull have slowed their pace. Watch the 50-day moving averages for signs of recovery or perhaps leadership for the market to downside. 

Apple (AAPL, +0.66%) and Facebook (FB, +2.01%) are trending higher along their upward trending 50-day moving average. Amazon (AMZN, +0.97%) is treading water here.

Downward slopes of the 50-day MA’s for Alphabet (GOOG, +0.93%) and Microsoft (MSFT, -0.78%) are cracks in an otherwise good picture for the group. Let’s see if they can straighten it out. 

Lots of attractive setups in Biotech as the Nasdaq Biotech ETF (IBB, +0.30%) holds its five-year base breakout. See succeeding breakouts below.

Software and E-commerce names continue to attract strong bids. As do any business that thrives with the stay at home theme, like streaming and home goods. 

Growth star Twillio (TWLO, +18.5%), soared to a new high after giving an optimistic forecast for its business that providing of cloud-based communication tools and services for developers.

The market may garner new upside leadership. This would likely come from names on the screens produced here each week. 

SUCCEEDING BREAKOUTS

Here are some succeeding breakouts that met our strict fundamental criteria:

Ticker	Company Name	Industry
APPS	Digital Turbine, Inc.	Internet Software/Services
BPMC	Blueprint Medicines Corp.	Biotechnology
BYND	Beyond Meat, Inc.	Food: Major Diversified
CDNA	CareDx, Inc.	Medical Specialties
COOP	Mr. Cooper Group, Inc.	Finance/Rental/Leasing
DDOG	Datadog Inc Class A	Packaged Software
FATE	Fate Therapeutics, Inc.	Biotechnology
FVRR	Fiverr International Ltd.	Data Processing Services
NVCR	NovoCure Ltd.	Medical Specialties
PTON	Peloton Interactive, Inc. Class A	Other Consumer Services
ROKU	Roku, Inc. Class A	Electronics/Appliances
SGEN	Seattle Genetics, Inc.	Biotechnology
TWST	Twist Bioscience Corp.	Biotechnology
Z	Zillow Group, Inc. Class C	Information Technology Services

Keeping it real,

Dan