AAPL and MSFT combined represent a total weighting of
approximately 22.5% of the NDX. These generals are the two
largest market cap stocks and certainly have a major impact on both
the SPX and QQQ. As we have discussed ad nauseum, the
indices are heavily skewed by a few big names (the Generals).
As you can clearly see in these charts, they ALL have formed
Leading Diagonal Patterns (five overlapping waves) from their
respective tops. This serves to support the notion that
the market has topped. I know there is considerable talk
about breadth thrusts bases upon last weeks' advance (and rightly
so) and the associated bullish ramifications of such when
looking out several months or more. However, we have a clear
symmetry break in the longer term charts which also points to a
lower high and a FOMC that is now in tightening mode (they haven't
yet started to address their balance sheet which is a much larger
issue). These IMO are valid reasons for extreme
prudence in the coming weeks.
For a major market TOP, you really want to see confirmed bearish
patterns across the major indices. The charts above are quite clear
but I was troubled with the SPX candlestick chart until I
examined a line chart showing CLOSING prices which did in fact
support the LD premise. (See my post yesterday on the SPX Daily
line chart).
Therefore, my primary view remains an LD off the top that
suggest the market has topped with the first leg of the bear market
LD completed with a Strong rally (as expected) out of the pattern
as the start of a corrective move back higher. LD's typically
have a LARGE retracement (even greater that .618 Fibs) so we should
see a larger ABC type move unfold over the coming weeks that
ultimately forms a LOWER HIGH prior the the next decline which
would be a Nasty impulsive leg down. The SPX has an open gap
(previously discussed) around
Since there remains a small doubt based upon the candlestick
charts, the alternative (as I pointed out below in the SPX post)
would be that the SPX bottomed in February as a larger Wave 4
with Wave 5 up to new highs in progress since the Feb low.
For NOW, both views are in sync supporting higher prices in
the coming weeks (bullish seasonality) BUT it's wise to remain
grounded for the longer term based upon the EVIDENCE I have
illustrated. See my comments below on the SPX
chart.
NDX APPL and MSFT (IMPORTANT DISCUSSION HERE)
Posted by steve on 20th of Mar 2022 at 02:49 pm
$NDX - Chart Link
$NDX - Chart Link
AAPL - Chart Link
MSFT - Chart Link
AAPL and MSFT combined represent a total weighting of approximately 22.5% of the NDX. These generals are the two largest market cap stocks and certainly have a major impact on both the SPX and QQQ. As we have discussed ad nauseum, the indices are heavily skewed by a few big names (the Generals).
As you can clearly see in these charts, they ALL have formed Leading Diagonal Patterns (five overlapping waves) from their respective tops. This serves to support the notion that the market has topped. I know there is considerable talk about breadth thrusts bases upon last weeks' advance (and rightly so) and the associated bullish ramifications of such when looking out several months or more. However, we have a clear symmetry break in the longer term charts which also points to a lower high and a FOMC that is now in tightening mode (they haven't yet started to address their balance sheet which is a much larger issue). These IMO are valid reasons for extreme prudence in the coming weeks.
For a major market TOP, you really want to see confirmed bearish patterns across the major indices. The charts above are quite clear but I was troubled with the SPX candlestick chart until I examined a line chart showing CLOSING prices which did in fact support the LD premise. (See my post yesterday on the SPX Daily line chart).
Therefore, my primary view remains an LD off the top that suggest the market has topped with the first leg of the bear market LD completed with a Strong rally (as expected) out of the pattern as the start of a corrective move back higher. LD's typically have a LARGE retracement (even greater that .618 Fibs) so we should see a larger ABC type move unfold over the coming weeks that ultimately forms a LOWER HIGH prior the the next decline which would be a Nasty impulsive leg down. The SPX has an open gap (previously discussed) around
Since there remains a small doubt based upon the candlestick charts, the alternative (as I pointed out below in the SPX post) would be that the SPX bottomed in February as a larger Wave 4 with Wave 5 up to new highs in progress since the Feb low. For NOW, both views are in sync supporting higher prices in the coming weeks (bullish seasonality) BUT it's wise to remain grounded for the longer term based upon the EVIDENCE I have illustrated. See my comments below on the SPX chart.
Thanks Steve.. appreciate all the
Posted by greggone on 20th of Mar 2022 at 09:32 pm
Thanks Steve.. appreciate all the detailed explanations here and in the newsletter...
Was looking at the TSLA daily chart and was wondering if what i'm seeing there is also a Leading Diagonal? Looks like it but I'm still learning...