S&P and Dow are overbought with the Nasdaq Composite somewhat weaker

The S&P 500 broke over the top of its bullish trend channel. This is, generally, a signal of weakness. The Dow is at the top of its bullish trend channel (also a temporary signal of weakness) and the Nasdaq Composite is weaker by comparison. The U.S. bonds and notes have been falling since early September. The 2-year note has fallen the most with the price lower than the July low. The 30-year bond is above the July low. Bonds change trend, according to John Murphy in Inter Market Analysis, between six and eighteen months before stocks. This means that stocks could start dropping in January.

FANG, Facebook, Amazon, NetFlix and Google have helped to support the stock market in the last few years. The only one of the four that is bullish is NetFlix; it has has had five straight quarters of increasing fund ownership. Facebook and Google have lost 1% in funds owning the stock while Amazon has lost 2%.

 

Here is the continuous contract of the U.S. 2-year Note (the yield moves opposite of the price, so interest rates have moved higher since early September):

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