Weekly Watch list September 14th – September 18th, 2020

The markets may be showing some support near the 50-day moving average. But a compelling indication that there is not a drastic selloff in progress is the fact that the transportation index has been moving sideways and upwards when the rest of the indexes have been selling off. Candlestick logic merely tells us that there is no consensus selling in this market, merely profit-taking. If new strength shows up in the markets you want to consider buying the shipping stocks GLMG, TNK, STNG, as well as FDX which has maintained a 45° for the past two months and now producing a slow curve upside breakout potential. The housing stocks are starting to move back up TOL, PHM, TMHC, KBH, LEN.  Application software stocks can be shorted on market weakness SMAR, VEEV, BLKB, WORK RPD, INOV. It would be prudent to have both long and short positions in the portfolio as long as the market indexes are not showing any direction. The bullish trend needs to see the market indexes close back up above the T line. The T line rule tells us the downtrend remains in progress with a much greater degree of probability as long as the indexes continue to trade below the T-line.