Stocks continue to plod ahead as market participants discount an economic recovery in '21. Three of the S&P 5 issues, Apple (AAPL), Alphabet (GOOG), and Facebook (FB), show decent trends, which is a welcome change.
This has left the Nasdaq comfortably above all three moving averages.
Sub-surface, most of the higher relative strength, more dynamic stocks have already moved out of consolidation areas. What we are left with is a large number of Focus List names that lack the initial thrust and unbridled accumulation that occurred following the Oct. 30 market low.
For this reason, I am playing lighter than normal, and am insisting on confirming volume for pattern breakouts (40%+ volume vs. the 50-day moving average of volume). Early entries do not require this hurdle.
One thing we have learned since the summer is that this bull market does not stand in the same place for very long, at least in terms of group rotation and fresh leadership.
With a correction that ended a day before the seasonally best three-month period of the year began, stocks appear set for upward revaluation. As always, let's maintain an open mind as to what could happen.
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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 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.