The Growth Stock Report – The Growth Stock Report

Quiet Riot

BUYER’S EDGE

Sector rotation still in effect as technology names see some institutional selling. The election may be loudly contested, yet the market stayed mostly subdued.

INDEX	WEEKCLOSE	CHANGE	% CHANGE	YTD %
DJIA	29263.48	-216.33	-0.7	2.5
Nasdaq	11854.97	25.68	0.2	32.1
S&P 500	3557.54	-27.61	-0.8	10.1
Russell 2000	1785.34	41.30	2.4	7.0

Weekly Advancing/Declining Volume	NYSE: 1.6, NASDAQ: 2.1
Accumulation/Distribution Count, 20 Days	S&P 500: 4/3, NASDAQ: 5/5
Weekly Advances/Declines, Issues	NYSE: 2.7, NASDAQ: 2.2
New Highs	NYSE: 377 (-13%), NASDAQ: 492 (-11%)
New Lows	NYSE: 25 (-38%), NASDAQ: 54 (-19%)

WHAT’S GOING ON

Big Tech leadership continues to fade.

Apple (AAPL, -1.61%),
Microsoft (MSFT, -2.57%), and
Facebook (FB, -2.62%) have narrowed their +two-month ranges.
Alphabet (GOOG, -1.96%) bucked the trend as it hit a new high.

Key Industry Action

Three-year base breakout in resorts and casinos, apparel manufacturers, apparel stores, personal services, drug manufacturers.
Home furnishings, medical devices new high.
Business services breakout.
Security and Protection, RV’s, beverages in cup and handle.
Luxury goods, right side of base.
Copper new high.
Medical distribution base breakout.

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	TIER	DEMAND	Industry
AAXN	Axon Enterprise Inc	4X	++	Aerospace & Defense
APPS	Digital Turbine, Inc.	3P	++	Internet Software/Services
AVLR	Avalara Inc	4X	++	Packaged Software
BERY	Berry Global Group Inc	4P	+	Containers/Packaging
BLFS	BioLife Solutions, Inc.	4X	++	Medical Specialties
BPMC	Blueprint Medicines Corp.	1P	+	Biotechnology
CDNA	CareDx, Inc.	4X	++	Medical Specialties
CELH	Celsius Holdings, Inc.	1P	++	Beverages: Non-Alcoholic
CGC	Canopy Growth Corporation	3P	++	Agricultural Commodities/Milling
COWN	Cowen Inc Class A	3P	+	Investment Banks/Brokers
CRDF	Cardiff Oncology, Inc.	3X	++	Medical/Nursing Services
EXAS	Exact Sciences Corporation	1X	++	Biotechnology
FATE	Fate Therapeutics, Inc.	1X	++	Biotechnology
FIVN	Five9, Inc.	4X	++	Information Technology Services
FOLD	Amicus Therapeutics, Inc.	4X	++	Biotechnology
FRHC	Freedom Holding Corp.	3P	++	Investment Banks/Brokers
FRPT	Freshpet Inc	4P	++	Food: Specialty/Candy
FSLR	First Solar, Inc.	4P	+	Electronic Components
FTCH	Farfetch Limited Class A	2X	++	Internet Software/Services
FUBO	fuboTV Inc.	1X	++	Movies/Entertainment
FUV	Arcimoto, Inc.	1X	++	Motor Vehicles
GRBK	Green Brick Partners, Inc.	4P	++	Homebuilding
GRWG	GrowGeneration Corp.	1P	++	Wholesale Distributors
HI	Hillenbrand, Inc.	4X		Industrial Conglomerates
HTH	Hilltop Holdings Inc.	4P		Regional Banks
HUBS	HubSpot, Inc.	4X	++	Information Technology Services
IIPR	Innovative Industrial Properties Inc	1P	++	Real Estate Investment Trusts
IIVI	II-VI Incorporated	1X	++	Electronic Equipment/Instruments
IPHI	Inphi Corporation	3X	++	Semiconductors
IR	Ingersoll Rand Inc.	3X	+	Industrial Machinery
LOB	Live Oak Bancshares, Inc.	3P	++	Regional Banks
MELI	MercadoLibre, Inc.	3X	++	Internet Software/Services
MGNI	Magnite, Inc.	4X	+	Advertising/Marketing Services
MRNA	Moderna, Inc.	1X	++	Biotechnology
MRTX	Mirati Therapeutics Inc.	1X	++	Biotechnology
NET	Cloudflare Inc Class A	4X	++	Information Technology Services
NOVA	Sunnova Energy International Inc	4X	++	Wholesale Distributors
NTLA	Intellia Therapeutics, Inc.	3X	++	Biotechnology
NTR	Nutrien Ltd.	1P		Chemicals: Agricultural
NTRA	Natera, Inc.	4X	++	Medical/Nursing Services
OCUL	Ocular Therapeutix Inc	1X	++	Pharmaceuticals: Major
OSB	Norbord Inc.	4P	+	Forest Products
PLAN	Anaplan, Inc.	4X	+	Packaged Software
PLUG	Plug Power Inc.	3X	++	Electronic Components
QTWO	Q2 Holdings, Inc.	4X	+	Information Technology Services
RARE	Ultragenyx Pharmaceutical, Inc.	1X	++	Biotechnology
RGEN	Repligen Corporation	4P	++	Pharmaceuticals: Major
ROKU	Roku, Inc. Class A	4X	+	Electronics/Appliances
RPD	Rapid7 Inc.	4X	+	Information Technology Services
SBGI	Sinclair Broadcast Group, Inc. Class A	4X		Broadcasting
SNAP	Snap, Inc. Class A	4X	++	Internet Software/Services
SQ	Square, Inc. Class A	1P	++	Information Technology Services
STNE	StoneCo Ltd. Class A	4P	+	Packaged Software
SWAV	Shockwave Medical, Inc.	2X	++	Medical Specialties
TER	Teradyne, Inc.	4P	+	Electronic Production Equipment
TRUP	Trupanion, Inc.	4X	++	Specialty Insurance
TWST	Twist Bioscience Corp.	4X	++	Biotechnology
Z	Zillow Group, Inc. Class C	2X	++	Information Technology Services

Keep your profits,

Dan

Rotation

BUYER’S EDGE

Trend’s still up until it’s not.

Big tech names sold off as value stocks were bid higher on the heels of the presidential election results. You’ve gotta go with what you see instead of what should be.

INDEX	WEEKCLOSE	CHANGE	% CHANGE	YTD %
DJIA	29479.81	1156.41	4.1	3.3
Nasdaq	11829.29	-65.94	-0.6	31.8
S&P 500	3585.15	75.71	2.2	11.0
Russell 2000	1744.04	99.88	6.1	4.6

Monday’s massive rally lost it’s steam by the end of the day as the S&P 500 closed 1.7% off its high on heavy volume. This mark will serve as resistance, while the 50-day moving average serves as support below.

Well above average volume makes for a convincing bullish argument. But watch the distribution on the Nasdaq. Market tops are a process more than they are an event.

Weekly Advancing/Declining Volume	NYSE: 1.6, NASDAQ: 1.3
Accumulation/Distribution Count, 20 Days	S&P 500: 4/3, NASDAQ: 4/5
Weekly Advances/Declines, Issues	NYSE: 4.1, NASDAQ: 2.6
New Highs	NYSE: 431 (+67%), NASDAQ: 552 (+50%)
New Lows	NYSE: 40 (-55%), NASDAQ: 67 (-53%)

We’re heading into traditionally strong time of year. We’re also seeing a lot of short covering.

Market leadership may be shifting. Let’s watch for new top names to set themselves apart from the pack. So far, we’re seeing healthcare names setup really nicely.

News from Pfizer (PFE, +6.1%) and BioNTech (BNTX, +15.22%) with their COVID vaccine reportedly more than 90% effective in trials could be a game changer for the economy.

Is this the end of the stay-at-home Covid economy? We’ve seen heavy selling in names like Teledoc (TDOC, -11.19%) and eSports ETF (ESPO, -4.86%), to name just a couple tracked here.

Consumer spending is strong as evident with small caps having a massive week as the R2K shot 6% higher with Q3 earnings from the S&P 600 topped expectations by 50%.

TOP DOWN, SECTOR PRICE ACTION & NEWS ANALYSIS

SYMBOL	NAME	% CHG	40EMA	CHART
XLE	Energy Sector Fund	17.11		Bucks a downtrend for the week with a powerful move, but still remains in a larger, two-year downtrend.
XLF	Financial Sector Fund	8.29		Shot convincingly above its four-month range. Lots of overhead resistance to cool its jets at these levels.
XLI	Industrial Sector Fund	5.43		New high, trend up.
XLRE	Real Estate Sector Fund	5.28		Shot convincingly above its four-month range. Lots of overhead resistance to cool its jets at these levels.
XLP	Consumer Staples Sector Fund	3.75		New high, trend up.
XLU	Utilities Sector Fund	3.06		Approaching new high as it carves the right side of a base.
XLV	Health Care Sector Fund	2		New high, trend up.
XLB	Materials Sector Fund	1.49		New high, trend up.
XLC	Communication Services Sector Fund	0.64		Approaching new high as it carves the right side of a base.
XLY	Consumer Discretionary Sector Fund	0.45		New high, trend up.
XLK	Technology Sector Fund	-0.31		Approaching new high as it carves the right side of a base.

Big Tech leadership has cooled.

Apple (AAPL, +0.48%), Microsoft (MSFT, -3.22%), and Facebook (FB, -5.61%) have narrowed their +two-month ranges.

Alphabet (GOOG, +0.87%) bucked the trend as it hit a new high.

Semiconductors (SMH, -0.41%) closed lower after hitting a new high. We want to see the uptrend stick here as the broader market correlated well with its success.

Healthcare (XLV, +2%) hit a new high.

Lots of individual names breaking out and setting up in Biotech (IBB, +2.41%). This theme has been a driving part of this report for months. Nothing new to readers here.

Cannabis (MJ, -4.32%) closed down for the week after a 27% upside charge last week. The Biden administration could decriminalized Marijuana at a federal level, and potentially a move to full legalization.

GSRTRADES

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

BREAKOUTS & PULLBACKS

Ticker	Company Name	TIER	Demand	Industry
CDNA	CareDx, Inc.	4X	++	Medical Specialties
CGC	Canopy Growth Corporation	3P	+	Agricultural Commodities/Milling
CRDF	Cardiff Oncology, Inc.	3X	++	Medical/Nursing Services
CYTK	Cytokinetics, Incorporated	1X	++	Biotechnology
EXAS	Exact Sciences Corporation	1X	++	Biotechnology
FOLD	Amicus Therapeutics, Inc.	4X	++	Biotechnology
FRHC	Freedom Holding Corp.	3P	++	Investment Banks/Brokers
FSLR	First Solar, Inc.	4P	++	Electronic Components
GRWG	GrowGeneration Corp.	1P	++	Wholesale Distributors
IIVI	II-VI Incorporated	1X	++	Electronic Equipment/Instruments
IPHI	Inphi Corporation	3X	++	Semiconductors
IR	Ingersoll Rand Inc.	3X	+	Industrial Machinery
MDB	MongoDB, Inc. Class A	4X	++	Packaged Software
NET	Cloudflare Inc Class A	4X	++	Information Technology Services
NOVA	Sunnova Energy International Inc	4X	++	Wholesale Distributors
NOW	ServiceNow, Inc.	4P	++	Information Technology Services
NTLA	Intellia Therapeutics, Inc.	3X	++	Biotechnology
NTRA	Natera, Inc.	4X	++	Medical/Nursing Services
OCUL	Ocular Therapeutix Inc	1X	++	Pharmaceuticals: Major
PINS	Pinterest, Inc. Class A	4P	++	Internet Software/Services
PLUG	Plug Power Inc.	3X	++	Electronic Components
RDS.B	Royal Dutch Shell Plc Sponsored ADR Class B	4P		Integrated Oil
SNAP	Snap, Inc. Class A	4X	++	Internet Software/Services
SQ	Square, Inc. Class A	1P	++	Information Technology Services
STNE	StoneCo Ltd. Class A	4P	++	Packaged Software
SWAV	Shockwave Medical, Inc.	2X	++	Medical Specialties
TER	Teradyne, Inc.	4P	+	Electronic Production Equipment
XPEL	XPEL, Inc.	4P	++	Automotive Aftermarket
Z	Zillow Group, Inc. Class C	2X	++	Information Technology Services

Follow GSRTrades for setups of top names.

Stay safe,

Dan

Helmets Ready

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

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.

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	+

Countdown

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.

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

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

Whip It

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.

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

Ride It

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

Unproven Bear

QUICK TAKE: No Bias. Leadership shows crumbles as the technical support of key moving averages is tested.

Choppy price action on the major indexes as the third week of straight selling for large caps saw rotation into value oriented defensive names.

INDEX	WEEK CLOSE	CHANGE	% CHANGE	YTD %
DJIA	27657.42	-8.22	-0.0	-3.1
Nasdaq	10793.28	-60.27	-0.6	20.3
S&P 500	3319.47	-21.50	-0.6	2.7
Russell 2000	1536.78	39.51	2.6	-7.9

A decline in sell volume bodes well for the bull market. Heavy, buying volume is partly attributed to options expiration Friday.

Look for second quarter window dressing to boost recent winners as we get closer to October.

The Bull isn’t over until it cast its shadow. Low interest rates, easy money and cheap borrowing for companies has been rocket fuel for this market.

Lots of news to stir the pot this week.

Weekly Bullishness:

Buyouts: NVIDIA (NVDA, +0.20%) to buy Arm Holdings from Softbank for ~$40 billion in cash and stock, and Gilead Sciences (GILD) buying Immunomedics (IMMU, +102%) for $21 billion, more than 100% premium.
The Snowflake (SNOW, +100%) IPO was off to a good start after being initially priced at $120 and closing the week at 240.
Marriott (MAR, +0.62%) reported a pickup in demand. Dividend remains on Hold.
AstraZeneca (AZN, +5.06%) resumed its COVID-19 vaccine trial in the UK. Pfizer’s (PFE, +1.55%)said it believes it will have enough data by the end of October to know if its vaccine is safe and effective. Merck (MRK, +2.31%) has begun human testing of a COVID-19 vaccine candidate.

Weekly Bearishness:

Federal Reserve Chairman Jerome Powell went on warning, “More fiscal support is likely to be needed,” for a “highly uncertain” economy, and that Congress needs to act quickly on another coronavirus relief package.
More virus lockdowns for Israel and social restriction for Europe as Covid-19 fears linger.
Predictions for lesser oil demand from the IEA, which said, “We expect the recovery in oil demand to decelerate markedly in the second half of 2020.” And BP, which called an end of an era for high growth in demand.

Retail Sales report for August was weaker than expected. Total sales were up 0.6% m/m (Briefing.com consensus 1.0%) following a downwardly revised 0.9% increase (from 1.2%) in July. Excluding autos, sales were up 0.7% (Briefing.com consensus 1.0%) following a downwardly revised 1.3% increase (from 1.9%) in July. The key takeaway from the report is that it points to some slowing in retail spending activity following the expiration of enhanced unemployment benefits, but, importantly, it didn’t reveal a spending contraction as increases were seen in many categories.
Initial jobless claims for the week ending September 12 fell 33K to 860K, against a forecast of 830K. Claims remain sky high compared to same week a year ago when they were 211K.
Online business review portal Yelp said their data showed that 60% of businesses that have permanently closed since the pandemic. Restaurants were hit hardest. The National Restaurant Association also said that 100,000 restaurants have closed either permanently or long term, accounting for $240B in lost sales.

LEADERSHIP

The tech bigs are in pullback mode. The overall market is likely to go where they do.

Microsoft (MSFT, -1.78%), raised its dividend by 1%. Stock has fallen sharply below its 50-day, which we’ll have to consider resistance now.
Facebook (FB, -5.28%) is dealing from a backlash from celebrities as well as antitrust issues from the FTC. It’s testing the support of the 50-dma.
Apple (AAPL, -4.61%) is also testing its 50-dma.
Alphabet (GOOG, -3.99%), is trading above its 50-dma.
Amazon (AMZN, -5.18%) is also trading above its 50-dma.

SECTOR ACTION

SYMBOL	NAME	SCTR	% CHG
XLE	Energy Sector Fund	17.4	3.03
XLI	Industrial Sector Fund	89.2	1.51
XLB	Materials Sector Fund	94.5	1
XLV	Health Care Sector Fund	50	0.91
XLRE	Real Estate Sector Fund	40	0.14
XLF	Financial Sector Fund	41.2	-0.12
XLU	Utilities Sector Fund	24.8	-0.7
XLK	Technology Sector Fund	82.6	-1.06
XLP	Consumer Staples Sector Fund	35.2	-1.48
XLY	Consumer Discretionary Sector Fund	88.7	-1.49
XLC	Communication Services Sector Fund	53.8	-1.74

EXCHANGE DATA

NYSE	18-Sep
Issues Traded	3,149
Advances	1,841
Declines	1,265
Unchanged	43
New Highs	206
New Lows	51
Adv Vol	12,490,600,585
Decl Vol	11,437,924,845
Total Vol	24,203,797,886
NASDAQ
Issues Traded	3,633
Advances	2,373
Declines	1,183
Unchanged	77
New Highs	230
New Lows	85
Adv Vol	12,259,610,396
Decl Vol	8,331,960,826
Total Vol	20,812,849,671
Volume Stats
NYSE Vol % Chng f/prev wk	46%
NYSE Adv/Dec Vol	1.1
Naz Vol % Chng f/prev wk	40%
Naz Adv/Dec Vol	1.5
Advances/Declines
NYSE	1.5
Naz	2.0
New Highs
NYSE	96%
Nasdaq	76%
New Lows
NYSE	0%
Nasdaq	-21%

Stay loose,

Dan

Last Buyer

QUICK TAKE: Sellers are running the game. Look out below. SELL BIAS.

Dear Reader:

Recent selling on heavy volume has nearly erased the S&P 500’s gains for August, sending it into its 50-day moving average for a test.

FOR THE WEEK:

INDEX	CLOSE	CHANGE	% CHANGE	YTD %
DJIA	27665.64	-467.67	-1.7	-3.1
Nasdaq	10853.55	-459.58	-4.1	21.0
S&P 500	3340.97	-85.99	-2.5	3.4
Russell 2000	1497.27	-38.03	-2.5	-10.2

There is no triggering event for the selling. Market tops don’t need a bell to signal, neither do short-term corrections.

The 10% correction is the fastest in history.

Look for signs the selling is over. Down volume will dry up, leaders will regain their momentum, money will stay in the market, perhaps rotating to different sectors rather than fleeing to cash.

We always want to be on the side of the majority of the institutions that tend to move the market.

Bull markets end when the last guy puts in his buy order. This, as far as I’m aware, has always been the inexperienced person turned sucker looking to ride the easy train.

This market has been nothing but an easy train for the new crop of young buyers gambling on their smart phones. That guy who founded Barstool Sports, companies like Nikola and Tesla that catch crazy bids without any earnings to back them are reminiscent of the tech bubble of 2000.

Don’t be surprised to see a retest of the 3000 level in the S&P. There’s no telling where the bottom is, just as there’s no really telling a top.

LEADERSHIP:

Biotech tests failure of a 5-year breakout. Many names in the group are posting solid earnings. Long-term outlook here is bullish given the post-pandemic interest in the field. Don’t be surprised to see a shakeout here.

Gold and Silver remain hot despite the pullback. Forget the macro gamble and just observe the price action here. That simple.

Still strong: Internet, Semiconductors, Cloud Computing and anything Stay At Home related.

The Big Five all look like bullish pullbacks on the weekly charts: Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOG), and Facebook (FB).

WEEKLY SECTOR ACTION:

SYMBOL	NAME	% CHG
XLB	Materials Sector Fund	0.98
XLI	Industrial Sector Fund	-0.3
XLU	Utilities Sector Fund	-0.74
XLY	Consumer Discretionary Sector Fund	-0.74
XLV	Health Care Sector Fund	-1.05
XLP	Consumer Staples Sector Fund	-1.36
XLRE	Real Estate Sector Fund	-1.93
XLF	Financial Sector Fund	-2.29
XLC	Communication Services Sector Fund	-3.24
XLK	Technology Sector Fund	-4.37
XLE	Energy Sector Fund	-6.45

Look for individual names later this week.

Dan

“If you gape after externals, you will inevitably be forced up and down according to the will of your master.” — Epictetus

Chest Pounding

Quick Take: Buy Bias. The train rolls until it doesn’t.

The sound of the bull pounding his chest in victory sure sounds like a signal for a top being put in.

For The Week:

INDEX	CLOSE	% CHANGE	YTD %
DJIA	28653.87	2.6	0.4
Nasdaq	11695.63	3.4	30.3
S&P 500	3508.01	3.3	8.6
Russell 2000	1578.34	1.7	-5.4

The S&P 500 and Nasdaq set record highs as the notched in five consecutive weeks of gains. And the Dow Jones Industrial Average turned positive for the year.

Bullishness feels to be at an extreme. The market will put in some type of top at some point, when, and how long it lasts is anyone’s guess.

The market headline of the week was with Fed Chair Powell who said the central bank would allow inflation to run moderately beyond 2.0% over time to make up for time when it ran below this mark.

The Nasdaq’s 30% gain for the year jives with the stay at home trends its technology leaders accommodate.

This has been a growth stock nirvana like this author hasn’t seen since 2000.

Salesforce (CRM) gained 30% this week, with a bulk of those gains coming after its earnings report.

On Monday the Dow will add Salesforce, Amgen (AMGN), and Honeywell (HON), which will replace Exxon Mobil (XOM), Pfizer (PFE), and Raytheon Technologies (RTX) prior to Monday’s open.

LEADERSHIP

Tech remains the major pull.

Facebook (FB, +9.98%), Apple (AAPL, +0.35%) Amazon (AMZN, +.09%), Netflix (NFLX, +3.56%) Google (GOOG, +4.05%) Microsoft (MSFT, +7.46%)

Biotech continues to pull back as it tests a five year base breakout.

Gold is also in pullback mode.

SECTOR ACTION

SYMBOL	NAME	WEEKLY % CHG
XLC	Communication Services Sector Fund	4.63
XLK	Technology Sector Fund	4.43
XLF	Financial Sector Fund	4.32
XLB	Materials Sector Fund	3.36
XLI	Industrial Sector Fund	3.06
XLY	Consumer Discretionary Sector Fund	2.98
XLP	Consumer Staples Sector Fund	2.29
XLRE	Real Estate Sector Fund	1.87
XLE	Energy Sector Fund	1.14
XLV	Health Care Sector Fund	1.1
XLU	Utilities Sector Fund	-0.59

TECHNICALLY SPEAKING

NYSE volume was up 6% from last week as advancing outpaced declining by nearly 2 to 1.
Nasdaq volume was slightly off las week’s pace, with a 1.5, advance/decline ratio.
NYSE advancing issues held a solid edge of decliners by a 2.1 ratio.
Nasdaq advancing issues held a 1.5 edge over decliners.

Accumulation/Distribution Days For The Last Month:

S&P 500: 7/2
Nasdaq: 3/4
Dow: 5/5

PLEASE REFER TO THE GROWTH STOCK REPORT FOR INDIVIDUAL NAMES.

Play it nice,

Dan

Bull Roll

Quick Take: Buy Bias. Growth Stocks continue to breakout and survive.

The Bull keeps rolling as the indexes flirt with new highs. A flood of money and a rebounding economy fuel the charge.

For The Week:

INDEX	CLOSE	% CHANGE	YTD %
DJIA	27433.48	3.8	-3.9
Nasdaq	11010.98	2.5	22.7
S&P 500	3351.28	2.5	3.7
Russell 2000	1569.18	6.0	-5.9

The economy likely bottomed out in April, according to many economists. While these “experts” don’t always get it right, there’s no denying improving data.

Workers are coming back in action. Nonfarm payrolls added 1.763 million for July. The belief is people returned to old jobs rather than new ones being created.

The unemployment rate has improved to just over 10%, this is an improvement from just over 11% in June. Bu it could take years to get the rate back below the pre-pandemic rate of 4%.

Further positive data came from the ISM report that showed manufacturing activity and non-manufacturing activity continued to expand in July.

Optimism over a vaccine was perpetuated with Novavax (NVAX, +19%) reporting positive results in its trials. The stock was highlighted multiple times here as a growth stock since April.

President Trump called for a shutdown of the China-based TikTok (ByteDance) and WeChat (Tencent Holdings, TCEHY, -1.85%) phone apps in the U.S. unless they found a domestic buyer within 45 days.

Trump may be angling for China to open its market to fair play for American companies. The possibility also lingers that the apps will be bought by Microsoft, as talk of a deal between the companies continues.

Look for more efforts to bring production back to the U.S., specifically pharmaceuticals, medical equipment and protective gear.

America depends on China for about half of its medical supplies. China is the U.S.’s second-largest source of car parts. China is also believed to provide about 60% of all imported electronics, including cell phones. On the other side of the balance China was the fastest-growing market for U.S. exports for fifteen years.

TECHNICALLY SPEAKING

Buy-volume prevails as the NYSE and Nasdaq posted buy/sell ratios of 1.6 and 1.7 respectively.
Total Volume on the NYSE and Nasdaq exchanges matched last week’s.
Advances/Declines favored bulls with 3.0 and 2.8 ratios.
New highs were up 12% for the week on the NYSE as it posted 289. The Nasdaq was up 50% at 477.

LEADERSHIP

Top tech stocks hold their high ground with uptrends above 50-day moving averages.

Facebook (FB, +5.82%), Apple (AAPL, +4.76%) Amazon (AMZN, +.09%), Netflix (NFLX, +1.20%) Google (GOOG, +0.78%) Microsoft (MSFT, +3.64%)

Walt Disney (DIS) rocketed 11% after reporting a second quarter profit and strong subscriber numbers for its streaming platform.

SECTOR ACTION

SYMBOL	NAME	% CHG
XLI	Industrial Sector Fund	4.74
XLF	Financial Sector Fund	3.37
XLE	Energy Sector Fund	3.19
XLC	Communication Services Sector Fund	3.1
XLK	Technology Sector Fund	3
XLY	Consumer Discretionary Sector Fund	2.47
XLB	Materials Sector Fund	2.24
XLP	Consumer Staples Sector Fund	1.29
XLU	Utilities Sector Fund	1.08
XLV	Health Care Sector Fund	0.83
XLRE	Real Estate Sector Fund	0.66

THE GROWTH STOCK REPORT

Lots of names in Biotech and Medical Devices setting up.

Click Here For Full Report

Stay safe,

Dan

Tech Pullback

Quick Take: Buyer’s Bias. Leadership takes a hit as the broader market pulls back.

Dear Reader,

There is very little to inspire buyers these days. The bias remains bullish here as long as institutional grade selling remains absent and price holds above major moving averages.

FOR THE WEEK:

INDEX	CLOSE	% CHANGE	YTD %
DJIA	26469.89	-0.8	-7.2
Nasdaq	10363.18	-1.3	15.5
S&P 500	3215.63	-0.3	-0.5
Russell 2000	1467.55	-0.4	-12

Profit taking in the Nasdaq saw many strong names come back closer to earth.

US relations with China remain at a low with the closure of the Chinese consulate in Houston, and the reciprocated action of closing the US consulate in Wuhan.

President Trump said the coronavirus will likely get worse before it gets better.

Consumer spending will take a hit this fall if Treasury Secretary Mnuchin’s plan of reducing unemployment benefits to 70% of what people were earning.

Gold hit another high as the Dollar hit a low. Defense under uncertainty is to be discerned from these types of moves.

Expect good earnings news to come out early in season for second quarter announcements. Bad news will likely come later, presenting a sentiment challenge for the bulls.

TECHNICALLY SPEAKING

Total volume for the week held pace with last week. Bulls held a slight edge with advance/decline ratios of 1.1 and 1.2 for the NYSE and Nasdaq.
The NYSE saw a 12% increase in new highs to 240.
Both the NYSE and Nasdaq had a 9% decrease of new low as they notched in 20 and 64 respectively.
On the Advance/Decline front, the bull cooled from last week as the NYSE posted a barely bullish 1.4 and the Nasdaq a barely bearish 0.8

WEEKLY SECTOR ACTION

Tech took a step back for the week as discretionary showed a bullish vote for the economy with its holdings in retail, automobiles, consumer durables, apparel, hotels, and restaurants.

SCTR	NAME	% CHG
Consumer Discretionary Sector Fund	XLY	1.7
Energy Sector Fund	XLE	0.82
Consumer Staples Sector Fund	XLP	0.54
Financial Sector Fund	XLF	0.32
Materials Sector Fund	XLB	0.31
Utilities Sector Fund	XLU	0.07
Industrial Sector Fund	XLI	-0.16
Real Estate Sector Fund	XLRE	-0.22
Communication Services Sector Fund	XLC	-0.56
Health Care Sector Fund	XLV	-0.79
Technology Sector Fund	XLK	-1.63

LEADERSHIP

Tesla (TSLA, -5.59%) sold off for the second week in a row. This electric car/technology company has been more of a read on sentiment than a solid investment. Its market cap has it as a potential new member of the S&P 500.

As a group, traditional leadership from the FAANG and friends declined with 50-day moving averages poised to serve as support.

Facebook (FB, -4.68%), Apple (AAPL, -3.85%), Netflix (NFLX, -2.54%) Google (GOOG, -0.24%.)

Microsoft (MSFT, -0.78%) reported lower than expected growth for its cloud server business Azure.

Amazon (AMZN, +1.58%) bucked the trend here as its pandemic friendly business continues to thrive.

Please refer to The Growth Stock Report for individual stock setups.

Play smart, play safe.

Dan

Corona Drift

Quick Take: Buy Bias. Fed fueled buying ignores weak business and economic data.

FOR THE WEEK

For all the reasons to sell amidst this coronavirus infected economy, the market just doesn’t.

The market will continue to drift higher until it doesn’t.

INDEX	CLOSE	CHANGE	% CHANGE	YTD %
DJIA	26671.95	596.65	2.3	-6.5
Nasdaq	10503.19	-114.25	-1.1	17.1
S&P 500	3224.73	39.69	1.2	-0.2
Russell 2000	1473.32	50.64	3.6	-11.7

Money shifted into value oriented Industrials, Materials and Healthcare this week as the tech gorillas cooled with a pullback.

Watch for growth stocks as a group to cool off as funds take profits from a legendary rally. Though opportunities still abound for new breakouts.

Big dividend payers remain a thing. Watch how the Dow doesn’t sell off as hard as the S&P 500 and Nasdaq on down days. Treasuries won’t yield much as the government promises to keep rates low for a couple of years.

Optimism is growing on the covid-19 vaccine front as a collaboration with Pfizer (PFE, +1.15%) and BioNTech (BNTX, +11.21%) received fast-track designation from the FDA.

Moderna’s (MRNA, +51.49) had reported a positive first phase in its study. Novavax (NVAX, +48.89%) also continues to receive votes of hope as its stock teared higher for another week.

The market’s V recovery continues to be supported by economic data.

The trend in job recovery continues, though about a third of the jobs lost during the virus lockdown have been recovered, according to US employment data released Thursday.

As the band plays upbeat, a darker reality threatens with the coronavirus.

States making up nearly a third of the US economy reported a fearsome uptick in covid-19 cases. California, Texas, Florida and Arizona are taking measures to counter the spread.

There’s no guidebook for this. We simply don’t know what to expect as the pandemic plays out.

No one expects year over year earnings for the second quarter to be good. The attention will go to guidance, as usual.

Analysts may have predicted the worst for companies struggling during lockdown, look for surprises, and more importantly the reactions to those surprises.

Big banks reporting earnings largely beat estimates as a group. But uncertainty in the market has led them to reserving more cash for failed loans.

News reactions were a mixed bag for the six largest banks reporting: Citigroup (C, -4.62%), JPMorgan (JPM, +1.96%), Wells Fargo (WFC, -2.04%), Goldman Sachs (GS, +2.85%), Bank of America (BAC, -3.33%) and Morgan Stanley (MS, +5.24%.)

Lack of participation in this bull market from the financials does not bode well for business. Price action on the Financial sector ETF (XLF, +2.09%) is not supporting a rosy future as it continues to struggle with mostly sideways chop.

LEADERSHIP

Tech leadership tests its bullish form with sizable drops. Let’s call it profit taking after huge runs since March.

Facebook (FB, -1.24%), Apple (AAPL, .42%) Amazon (AMZN, -7.44%), Netflix (NFLX, -10.16%) Google (GOOG, -1.7%) Microsoft (MSFT, -5.05%)

Netflix (NFLX) shares fell 10%, with a bulk of those losses coming after the company issued cautious subscriber guidance at the end of the week.

Gold (GLD, +0.55%) and Biotech (IBB, +3.41) have their breakouts intact. These have been the drivers in the Materials and Healthcare sectors.

TECHNICALLY SPEAKING

The S&P 500 is poised for another breakout as it trends above its major moving averages, just 5% from its 52-week high.
NYSE volume was 7% lower than last week as edged out sellers with a 1.2 ratio.
Nasdaq volume was 10% higher as buyers prevailed with a 1.7 ratio.

TICKER	INDUSTRY ETF	% CHG
XLI	Industrial Sector Fund	5.87
XLB	Materials Sector Fund	5.47
XLV	Health Care Sector Fund	5.14
XLU	Utilities Sector Fund	4.22
XLE	Energy Sector Fund	3.24
XLP	Consumer Staples Sector Fund	2.16
XLF	Financial Sector Fund	2.09
XLY	Consumer Discretionary Sector Fund	0.4
XLRE	Real Estate Sector Fund	0.06
XLC	Communication Services Sector Fund	-0.5
XLK	Technology Sector Fund	-1.16

GROWTH STOCKS

Buyer’s Bias intact. Opportunities abound.

BREAKOUTS

AEYE	AudioEye, Inc.	Internet Software/Services
ALNY	Alnylam Pharmaceuticals, Inc	Biotechnology
CHGG	Chegg, Inc.	Miscellaneous Commercial Services
CRSP	CRISPR Therapeutics AG	Biotechnology
CRWD	CrowdStrike Holdings, Inc. Class A	Packaged Software
IMMU	Immunomedics, Inc.	Biotechnology
NK	NantKwest, Inc.	Biotechnology
PAAS	Pan American Silver Corp.	Precious Metals
RARE	Ultragenyx Pharmaceutical, Inc.	Biotechnology
RMBL	RumbleOn, Inc. Class B	Information Technology Services
SEDG	SolarEdge Technologies, Inc.	Electrical Products
TNDM	Tandem Diabetes Care, Inc.	Medical Specialties
TTD	Trade Desk, Inc. Class A	Advertising/Marketing Services
WRTC	Wrap Technologies, Inc.	Industrial Conglomerates
ZM	Zoom Video Communications, Inc. Class A	Packaged Software

BASES

ALBO	Albireo Pharma, Inc.	Pharmaceuticals: Other
AXNX	Axonics Modulation Technologies, Inc.	Medical Specialties
CGEN	Compugen Ltd.	Biotechnology
DRNA	Dicerna Pharmaceuticals, Inc.	Biotechnology
EXAS	Exact Sciences Corporation	Biotechnology
OCUL	Ocular Therapeutix Inc	Pharmaceuticals: Major
OR	Osisko Gold Royalties Ltd	Precious Metals
OTRK	Ontrak, Inc.	Medical/Nursing Services
STNE	StoneCo Ltd. Class A	Packaged Software
XLRN	Acceleron Pharma Inc	Biotechnology
Z	Zillow Group, Inc. Class C	Information Technology Services

Control your loses, let your winners run.

Dan

SYMBOL	NAME	% CHG	40EMA	CHART
XLE	ENERGY	5.7		Second week of rallying brings it to the 40EMA, but still a downtrend.
XLB	MATERIALS	1.09		Pullback from new high last week.
XLI	INDUSTRIAL	1.05		Inches up to new high for second week in a row.
XLF	FINANCIAL	0.55		Convincingly above 40EMA, 15% off high.
XLY	CONSUMER DISC	0.16		Pullback from new high last week.
XLC	COMMUNICATIONS SRVCS	-0.36		Pullback in handle of 10-week base.
XLK	TECHNOLOGY	-0.9		Pullback in handle of 10-week base.
XLRE	REAL ESTATE	-1.52		Pullback in handle of 9-mo. base.
XLP	CONSUMER STAPLES	-1.53		Fades from new high.
XLV	HEALTH CARE	-2.96		Pullback from new high last week.
XLU	UTILITIES	-3.86		Pullback in handle of 9-mo. base.

	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

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.