August 19, 2020

Stocks posted moderate losses Wednesday after the release of the Fed's minutes from its latest meeting put the kibosh on a morning rally. The selling did little to change the technical posture of the averages, which remain positive though with a bit less participation among the growth leadership.

Stocks have entered the final two weeks of the summer months, a time that normally sees lighter activity due to the prevalence of vacations.

Following the Nasdaq's three-day pullback that ended early last week, growth leaders idled during the first few days of rally in the index. The snapback that one would normally expect to see was not all there. This past Monday, however, saw some better action in titles like (JD), Sea Ltd (SE), Square (SQ), Tesla (TSLA), Zillow (Z), and Zoom Video Communications (ZM), among others, which was our cue that the coast was clear.

Notwithstanding this, pattern setups remain few and far between. Let's stay patient and realize that, at some point, every bull market's leadership cannot run forever without taking some time to rest.

To enlarge the following charts, please click on them.

Autodesk (ADSK)

Bilibili (BILI)

Carvana (CVNA)

Pinduoduo (PDD)

In sum, a market in the midst of resting from its five-month run coincides with one of the seasonally slowest times of the year. Let's be patient until the time comes when the menu of pattern setups begins to expand again. In the meantime, a few things set up, which are discussed above.

Kevin Marder

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All stock charts created using MarketSmith unless otherwise noted. ©2020 MarketSmith, Incorporated. All other charts created using TradeStation. ©2001-2020 TradeStation Technologies. All rights reserved.

The views contained herein represent those of Marder Investment Advisors Corp. At the time of this writing, of the stocks mentioned in this report, Marder Investment Advisors Corp., Kevin Marder, or an affiliate thereof held positions in JD, SE, SQ, and TSLA, though positions are subject to change at any time and without notice. Estimate data provided by FactSet. Expected earnings release dates provided by EarningsWhispers.