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 %|
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.
|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|
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.
Here are some succeeding breakouts that met our strict fundamental criteria:
|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,