The S&P 500 has been in a short-term bullish trend since early December. Its bullish trend line is drawn from that point to the January 23 low. A parallel line put just above the December 13 high shows the bullish trend channel. The price broke the top line on March 1, but a two-day bearish reversal brought it back inside a day later. This pattern, a failed escape above, is a sign of weakness. Sure enough the price has fallen since then.
The Dow followed a similar pattern to the S&P, but the price has not fallen as much. This isn’t surprising as the stocks in the Dow are defensive in nature.
The bullish line for the Nasdaq Composite was drawn from the November 4 low and the December 30 low. The parallel line, making up the trend channel, is placed at the November 25 high. It is obvious that the highs have not kept pace with lows as there is an increasingly large space between the highs and the top of the bullish trend channel. This is a wedge. It is a sign of weakness as it shows a lack of demand.
The Federal Reserve’s decision to “increase rates” seemed to have two main effects: it hurt the bank stocks because people thought their expenses have increased and people believed the complete falsehood that the economy is heating up. There is a world of difference between our economy that isn’t sinking hard – and true growth.
Both the Automobile and Building Sectors had the most growth since March 1: 4.5%. Here are the 3-year sales figures from the Auto sector:
The average is 0.45. If TSLA is omitted, the average is -4. In either case, it’s utterly terrible. The stock market is being pushed up by nothing. It won’t take much to make the stock market tumble.