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US Markets Demonstrate Confidence Despite Election JittersThe US markets are currently demonstrating a bullish sentiment, despite concerns surrounding the upcoming election. All major indices, including the S&P 500, NYSE Composite, and Nasdaq Composite, have formed a bullish Cup & Handle chart pattern and have subsequently broken to follow an upward trend. While the S&P 500 and NYSE Composite have reached new all-time highs, the Nasdaq Composite is close to its highest peak, further reinforcing the positive market outlook. 'This overall bullish sentiment suggests that the upward trend in the US markets is likely to continue, even in the face of election-related uncertainties.
SP:SPXLong
by NaranjCapital
3
NYSE Composite - Price Action Consolidated In A Triangle Pattern(1) The price was in an upward trend before reaching the 17,500 level. (2) Following that, the price began to decrease, experiencing a drop of nearly 21%. (3) After finding support near the 13,300 level, the price rose and broke through the neckline of the Inverted Head & Shoulder pattern. (4) Subsequently, the price increased and is currently consolidating within a triangle pattern. (5) If the price successfully breaks out, the potential resistance level will be around 19,650.
NYSE:NYA
by NaranjCapital
Technical Analysis Of NYSE Composite Index In Daily Timeframe (1) After the breakout of the Rounding Bottom pattern, price has given a sharp upside rally and reached to its previous All Time High at near 18,340. (2) After that, a sharp correction has been seen, which was quite natural. Price took support at near 17,380 level. (3) Then with a strong up move, price made a fresh All Time High at near 18,400 level. (4) 18,330 level will act as an immediate support level for the price and It is expected that the price will go up again from this level and achieve new highs. (5) The overall sentiments will remain positive until the price is trading above the 17,380 level.
NYSE:NYA
by NaranjCapital
Berkshire Hathaway Inc. New WCA - Classic Rectangle PatternHello and thank you for taking the time to read my post. Today, we analyze Berkshire Hathaway Inc. New's chart on the weekly scale, focusing on a classic price pattern called the "Rectangle Pattern." Berkshire Hathaway Inc. New is a diversified financial services conglomerate, traded on the NYSE under the tickers BRK.A (Class A shares) and BRK.B (Class B shares). Classic Rectangle Pattern: The classic rectangle pattern is a chart pattern formed when the price of an asset moves between two parallel horizontal lines, representing support and resistance levels, over a period of time. In essence, it reflects a consolidation phase where the market is undecided about the direction of the trend. Analysis: In the case of Berkshire Hathaway Inc. New, we observe a 322-day rectangle with several touching points. The upper boundary is at 320$, and the lower boundary is at 264$. The price chart has just broken out of the rectangle and is re-testing the old resistance as support, which makes an entry interesting. All this happens while we are above the 200 EMA, which supports a bullish environment and an idea on the long side. Additional Analysis: The recent breakout from the rectangle pattern and the re-test of the old resistance as new support suggest a potential upward trend continuation. As we are above the 200 EMA, the bullish environment is further supported, making long positions more attractive. The price target is at 376$, which represents a potential ~17.5% price increase. On the way to the price target, we can expect to encounter resistance at 360$. Conclusion: The Berkshire Hathaway Inc. New weekly chart showcases a classic Rectangle Pattern, reflecting a consolidation phase in the market. The recent breakout and re-test of old resistance as support, combined with the price being above the 200 EMA, signal a potential continuation of the bullish trend. With a price target of 376$ and intermediate resistance at 360$, traders should remain vigilant and consider proper risk management strategies when entering long positions. Company: Berkshire Hathaway Inc. New Ticker: BRK.A (Class A shares) / BRK.B (Class B shares) Exchange: NYSE Sector: Diversified Financial Services Please note that this analysis is not financial advice. Always do your own due diligence when investing or trading. Best regards, Karim Subhieh
NYSE:BRK.BLong
by KarimSubhieh
2
Equity Mid Year Macro UpdateIn January I reviewed the long-term technical and fundamental positions of the big four: Bonds, Equities, Commodities, and the Dollar. Those pieces are extensive in terms of both fundamental and technical outlooks and are linked for your review below. I made two particularly important fundamental observations: 1. Both policy vectors (Fiscal and Monetary) are turning negative and are unlikely to provide support. This may change if rising rates break the weakest financial link forcing the Fed to pivot to address a systemic issue or if Congress decides that another money drop is appropriate. 2. Of the 19 bear markets since 1929, 15 have been accompanied by rising inflation. Rising inflation is by far the most consistent/reliable of the bear market factors. The SPX piece concluded: "The technical trend to higher prices is intact, but, from this trend position, the market is extremely vulnerable. While not yet discontinuing bullish strategies, I would be extremely wary, reducing commitments and deciding on risk management levels. Shorter term time frame weakness can easily morph into something greater." Where are the markets now? Since those January posts, equities are sharply lower and both technical and fundamental factors have deteriorated markedly. I suspect that by the end of the fourth quarter the balance of the techncial data will have, at the very least, confirmed that the 14-year uptrend is over. While price behaviors in the SPX and NYSE Composite have yet to confirm a primary bear market, I think it likely that at the least, an extended bear is unfolding. Since January, the monetary vector has turned decidedly negative (rapidly increasing Fed Funds rate and quantitative tightening), and while the recent declines in commodities are creating optimism, the inflation rate continues to worsen. Even should inflation moderate it remains far in excess of the rough 3% threshold above which most companies struggle. Most importantly the Fed has clearly pivoted from the economy and toward inflation. Because they waited so long to pivot, the battle will be a prolonged one and will likely require a recession, perhaps a serious one, to win. In short, the liquidity that propelled the bull market has reversed and the prospects for it returning soon are limited. Currently I see no immediate systemic issues that could require a response from the Fed but I am growing more concerned around emerging markets. I also continue to monitor credit conditions (see the post linked below for how to monitor credit on the platform) but so far, the widening in credit spreads isn't compelling. SPX Monthly: Log Scale: The market has spent nearly 15 years confined to an upward sloping channel. Prior to the pandemic selloff the market uptrend was best described by the channel defined by trendlines A-B and A1-B1. Despite the channel being violated by the pandemic decline (G), I continue to view A1-B1 as the primary trend support. As long as this trend line remains intact, the price trend in the monthly perspective remains higher. Two observations. 1) Over the 15 years price spent a tremendous amount of time pressed against the top of the channel suggesting strong underlying demand. 2) At the January 2022 high, price overthrew the top of the channel. This "overthrow" behavior often occurs near the end of extended trends. In my view, a violation of the A1-B2 uptrend will move the long-term trend from up to neutral. To then define a downtrend the market will need to begin building a pattern of lower highs and lower lows. Monthly momentum oscillators have rolled over. I have included a basic MACD oscillator on the chart. I don't use oscillator crosses as buy or sell signals, but I do utilize them as trend filters. NYSE Composite Monthly (NYA): Log Scale: I prefer to define broad equity via the behaviors in the NYSE Comp. Many of the same observations for the SPX (trendlines and momentum) hold true for NYA. Notably there is an extremely large wedge pattern that will be activated with a drop below roughly 11k (roughly 20% further). The roughly 20% year to date decline from the all-time seems modest by historical standards. Granted, since the great financial crisis declines have been generally in the -20% zone. But that was against the backdrop of nearly constant quantitative easing. Absent QE, and against a backdrop of rapidly deteriorating economic fundamentals, the current environment is far different. I have also marked the chart with recession bands. Many commentators are making the case that equites often bottom near the beginning of a recession. I don't see the evidence. In fact, if the US/World is just entering a recession, I wouldn't expect an equity bottom anytime soon. Again, the reaction function of the Fed may come into play. While I think the Greenspan Put is dead, or at least the strike is much lower than in the past, if credit markets freeze or a major systemic issue develops they may feel forced to pivot. Triple Screen: Monthly momentum has clearly turned lower, and could easily support significant additional losses. Weekly oscillators are moving into configurations that could support some recovery, but it’s likely that strength will be corrective. The mostly lateral movement that has developed in the daily perspective is consistent with a market relieving an oversold condition. Conclusions: 3. The technical uptrend that has defined the markets path since 2008 remains intact but will likely fail later this year. 4. The weight of evidence, both fundamental and technical, suggests that the current decline is early to mid-stage, and that the uptrend will fail. The moving the long-term trend from up to neutral. 5. The important difference between this decline and the more run of the mill declines that have occurred since the GFC is monetary policy. The Fed has fully pivoted to fighting inflation. Having already erred by assuming transitory inflation, they will be very slow to pivot back to the economy and asset prices. 6. While it would not be surprising to see a decent tactical rally develop in coming weeks, it isn't likely to evolve into a new bull. I will be a much better seller of strength in daily and weekly perspectives. 7. While the market at the index level is vulnerable, many component names are much more advanced in their bear markets. There are opportunities beginning to show up. The caveat (as always) is the Fed. If systemic issues develop and they pivot from inflation, all bets are off. Good Trading: Stewart Taylor, CMT Chartered Market Technician Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
SP:SPX
by CMT_Association
44