Despite the huge celebration of Nvidia’s earnings report, we’re seeing troublesome indicators that the market is within the means of placing in a prime. There are double prime formations on six of the 9 main indexes we observe, however the three indexes that have not topped but, Nasdaq 100, S&P 100, and Nasdaq Composite, have heavy affect from huge tech shares.
We even have double or triple tops on 9 of the 11 S&P 500 Sectors. Of the 2 remaining sectors solely Expertise (XLK) hasn’t topped. Client Staples (XPL) does not have a double prime, nevertheless it does seem to have topped — a double is just not required.
As we had been writing this text, the market made new, all-time highs intraday, nevertheless it reversed fairly sharply, supposedly due to fear that the Fed will not reduce charges this yr. We desire to assume it had extra to do with the technical issues (many damaging divergences) we see on the chart beneath.
Conclusion: The very good efficiency of the know-how sector, and Nvidia specifically, has drawn consideration away from different areas of the market the place the image is just not so stellar. Whereas most of these areas are usually not but in a ditch, value motion is telling us to arrange for potential issues within the close to future.
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Carl Swenlin is a veteran technical analyst who has been actively engaged in market evaluation since 1981. A pioneer within the creation of on-line technical assets, he was president and founding father of DecisionPoint.com, one of many premier market timing and technical evaluation web sites on the net. DecisionPoint focuses on inventory market indicators and charting. Since DecisionPoint merged with StockCharts.com in 2013, Carl has served a consulting technical analyst and weblog contributor.
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