August 30, 2020

Stocks lifted last week as continued progress was made by the big five Nasdaq bellwethers despite late-summer lackluster volume. More than anything else, the market is a story of a select few mega-cap technology issues, as immune to the pandemic as they are, tugging the averages higher.

Nearly every day following the 6 p.m. ET open of the overnight futures session, the indices are bid higher as the unprecedented central bank money creation finds a home.

Otherwise, as the averages move higher, most growth stocks remain extended as they form three-week consolidations. Most of the true dynamic leaders broke out of bases earlier in this five-month bull market.

Given the thin menu of pattern setups and the seasonal dry-up in volume, fresh-money buys are not expected to provide an attractive reward-to-risk ratio. This may change following the Labor Day holiday a week from tomorrow as vacationing participants return to their desks. Moreover, it may take a pullback in the averages to provide more actionable ideas. This is often the case, as it was twice in '19, when the growth-stock leadership is resting or is otherwise not providing much to chew on.

As mentioned recently, I have found such periods of reduced opportunity a good time to suspend new buys as opposed to taking the few setups that trigger. This is not to imply cash is king: Holdings that act well should be managed as usual. The following three names are discussed for those who seek to be active in this market.

To zoom in on the following charts, please click on them.

Dynatrace (DT)

Pan American Silver (PAAS)

Pinduoduo (PDD)

In sum, this is a go-slow market with respect to fresh-money buys. Let's be patient and understand that we are still in the early innings of a bull market, per historic norms.

Kevin Marder

For intraday ideas and analysis: https://twitter.com/mardermarket

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 no positions, though positions are subject to change at any time and without notice. Estimate data provided by FactSet. Expected earnings release dates provided by EarningsWhispers.