1. NASDAQ
Stocks made a massive comeback last week, but what was becoming clear was that fewer stocks were leading the charge, especially in the.
The NASDAQ composite remained strong at the index level, but the percentage of stocks above their 50- and 200-day moving average were 24% and 29%, respectively, very low levels. This tells us that there were very few stocks participating in the NASDAQ rally.
In addition, the cumulative aspect of the number of new highs minus new lows has reversed, with the number of stocks increasing steadily. This only happened during times when the overall index was going down.
2. NYSE
Research for stocks traded in the didn’t look so bad, but we still saw that the new cumulative highs minus the new lows started to reverse as well.
3. Utilities versus biotechnology and technology
In addition, there were signs of sentiment slipping away from the more aggressive parts of the market towards the more secure parts. The XLU / XBI ratio showed that the Utilities Select Sector SPDR® Fund (NYSE 🙂 seemed to stand out from the SPDR® S&P Biotech ETF (NYSE :), with utilities outperforming biotech only just beginning.
Plus, utilities have never been better than technology. This means that the Technology Select Sector SPDR® Fund (NYSE 🙂 is worth more against the XLU than even during the dot.com period.
Additionally, this chart shows that a bullish divergence in the RSI has formed, suggesting that utilities are starting to outperform technology soon. On top of that, there was a falling wedge pattern, which also supported the bullish narrative for utilities. Of course, this does not mean that public services are increasing; it could also mean that they fall less.
4. S&P 500
There was a bearish divergence that formed, and I think we will see prices lower in the days and weeks to come.
5. Apple
Looking at Apple (NASDAQ :), we can see that the stock was very overbought and in a gamma compression. The stock should have strong resistance around $ 181.25, and with an impulsive upward move almost complete, I think the stock is likely to come back towards $ 145.
6. Alphabet
Alphabet (NASDAQ 🙂 had a bearish divergence pattern with a falling RSI as the stock rose. I could see this stock trading at around $ 2,500 in mid-January.
7. NVIDIA
What if today’s NVIDIA (NASDAQ 🙂 turns out to be nothing more than 2000’s Cisco (NASDAQ :). That’s an interesting question. The graphics were surprisingly similar then and compared to now. When you look at the following table, ask yourself the question and be honest. Would you be a buyer of NVIDIA at these levels?
NVIDIA Graphics
8. Advanced micro devices
Now another ironic stock is Advanced Micro Devices (NASDAQ :). Today’s AMD also seemed to follow Intel’s (NASDAQ 🙂 track very closely in the late 90s. I found that amusing.
AMD Graphics
But again, you could make the same argument for today’s S&P 500 versus the S&P 500 of the late ’90s. The paths were just surprisingly similar.
S&P 500 chart
It’s not just the price tables that are copied. This is also the PE report. The PE ratio for the NTM, for the S&P 500 from 1998 and today, follows a similar path for today. Either way, past charts tell us that we are now on the other side, and above the peak, and are now entering the multiple compression phase.
S&P 500 chart
