Broadening Top for U.S. Stocks (VALUG)One valuable yet overlooked, a tool for gaining insight into the market is the Value Line Geometric Index (VALUG).
VALUG index contains a mix of roughly 1,700 stocks from the major North American market indexes.
It is equal-weighted, uses a geometric average, and has a daily change closest to the median stock price change.
VALUG uses an arithmetic mean, with the daily change in the index reflecting a portfolio consisting of stocks in equal amounts.
VALUG has a broadening top formation.
VALUG
Leading Indicators are very BearishThe JNK ETF is heading further down with a big bearish Marubozu that is the YTD low -> Bearish for equities.
The IWM ETF is also heading further down for a lower low with a bearish Marubozu engulfing -> Bearish for equities
The DJT ETF ended on a recent low too -> Bearish for equities
The VALUG has a bearish candle for more downside -> Bearish for equities
The TIPS ETF bearish marubozu ending on a YTD low-> Bearish for equities
The TLT ETF is diving -> no flight to safety, just selling.
The VIX is coiling -> bearish outlook for equities, more volatility incoming when it spikes!
The HG1! copper futures ended on a strong low for the week, and will be attacking support. Expect failure.
Overall, very Bearish bias on equities for the next couple of weeks, and at least until the VIX spikes very hard before retracing (it is only coiling now...)
Leading Indicators Reversal Still BearishThe JNK ETF looks like it is heading further down still -> Bearish for equities.
The IWM ETF is likely to follow through after closing at a low -> Bearish for equities
The DJT ETF looks a tad bearish too -> Bearish for equities
The VALUG looking to fail support, with a bearish candle for more downside -> Bearish for equities
The TIPS ETF continue down draft-> Bearish for equities
The TLT ETF is still diving -> still not seeing any flight to safety.
The VIX just broke out above the trendline -> very Bearish for equities
The HG1! copper futures downtrending
Overall, rather Bearish bias on equities
Leading indicators are BearishVery quickly before the market opens...
The JNK ETF is heading further down for lower low -> Bearish for equities.
The IWM ETF is likely to follow down continuing the candle -> Bearish for equities
The DJT ETF broke support -> Bearish for equities
The VALUG failed the resistance, with a bearish candle for more downside -> Bearish for equities
The TIPS ETF gave up and gave way -> Bearish for equities
The TLT ETF is looking for a non-existent bottom -> no flight to safety. just gave way, period.
The VIX just broke out and checked in at the support... spiking up soon?
The HG1! copper futures stalled at resistance.
Overall, Bearish bias on equities
Leading Indicators messyWith the current global situation where there are day by day developments, the Leading Indicator panel offers similar dichotomy...
The JNK ETF is heading further down -> Bearish for equities.
The IWM ETF is likely to push down in a somewhat limited fashion -> Bearish for equities
The DJT ETF appears to be bouncing up -> Bullish for equities
The VALUG looking for more downside -> Bearish for equities
The TIPS ETF is spiking after a gap up, bullish for TIPS -> Inflation is exploding! Ususally bullish for equities, but in this instance, not likely.
The TLT ETF is bottom feeding, and there is a MACD bullish divergence -> this suggests that the fear is not yet great enough for a flight to safety. Not yet.
The VIX just broke out of a trend line and is pushing towards 45.
The HG1! copper futures suggest an anomalous accumulation of copper, maybe forerunning the equities market upwards, but otherwise, if a general reflection of commodities rocketing in prices.
Overall, Bearish bias on equities, with the chance of a quick rebound soon... but not before a spike down first.
Totally tied to the Russian Ukraine events for now.
Leading Indicators Reversal in ProgressInteresting... in the last couple of weeks, as the Leading Indicators signaled a retracement, it appears that it may be time for a technical bounce...
JNK broke down as expected, and exceeded target. Last week's candle had a long tail recovery, and this current week is forming a rebound.
MACD still in bear territory.
IWM, DJT and VALUG all seemed to have retraced hard, and bounced off a support. MACD crossed and still in bear territory... may not be over. sus.
TIPS failed a support and does not seem to be recovering, not bouncing for the matter. MACD appears to be recovering though. This one is rather odd, so I would just note and leave it for now.
TLT is not bullish as one would expect it to be. In fact, it looks bearish, which is favorable (bullish) for the equity markets.
VIX failed a solid break out and looks to be finding 16 again, signalling the interim volatilty is over and more bullish markets to prevail.
/HG Copper futures are held in a tight range and appear to be recovering this week - if it can hold steady and break out. MACD is not yet bullish.
Overall, the leading indicators are signalling an interim bottom. perhaps a larger than expected rebound should follow in the coming weeks...
Equally Weighted Index Suggests SPX Could Go Near its 2016 Lows This is simply (forget all the FED stimulus holding these markets up) a case of market-cap weighted exaggeration vs an equally-weighted reality:
While the S&P500 Index (market-cap weighted) is bear rallying higher since its March 2020 lows, the Value Line Geometric Composite Index (equally weighted) is NOT confirming this move at all.
The SPX has made it back near its 2019 lows and 2018 highs while the Geometric Composite Index is currently only back up to near its 2016 market levels. This illustrates to me that the SPX is being pulled higher by the massive market cap of the big 5 technology stocks of the SPX - remove those names or equally weigh them in the index and we should be much lower, at least near the 2000 level on the SPX.
SPX and SPX minus Maga stocks comparisonSPX and SPX minus Maga stocks comparison (Microsoft, Apple, Google and Amazon) and also Value Line Geometric Index (the "invisible" common NYSE stock performance)
Resistant levels - finding markets bottoms at priori modeResistant levels - finding markets bottoms at priori mode Finding markets bottoms - priori mode, important resistance levels signaled at red color in spx index and based on value line geometric line, ie, common stock performance...
