The Stock Market Is Topping. Here’s The Evidence.

“Bullish %” represents the proportion of shares in a selected index now buying and selling in bullish point-and-figure chart patterns, that old style worth evaluation that the MBA’s on the massive funding companies can’t cease chuckling over. “Oh no, not technical evaluation once more! Are the tarot playing cards subsequent? Please!”

High-quality, allow them to hold poring over their boring stability sheets and solely considerably plausible revenue statements after which ignoring all of that when it’s clear they missed out on the massive transfer up in 7 tech shares.

It’s humorous to see all of that enterprise faculty studying fly out the window when their strategies underperform the NASDAQ-100 by 20 or 30%.

Inventory Market Is Topping Components:

This every day chart exhibits the proportion of these shares within the NASDAQ-100 presently in bullish point-and-figure chart patterns.

Right here’s the issue: although the index itself is hitting new all time highs, the variety of shares in bullish patterns is fewer than on the February peak and fewer than on the December, 2022 peak. This unfavourable divergence signifies underlying weak point within the NASDAQ-100.

This chart present the proportion of shares within the Normal and Poor’s 500 now in point-and-figure bullish patterns:

Because the S&P 500 index itself strikes up into new all-time excessive territory, the proportion of shares inside can’t make a brand new excessive. It’s decrease right here than it was in early February and in early December, 2022. That is one other case of underlying energy waning steadily.

Right here’s the every day chart for the volatility index:

It’s making new lows on this 8-month chart. This extraordinary low stage represents investor confidence that the inventory market is in effective situation and can all the time stay so. That’s a volatility good vibe, the type of feeling that some consider develops across the time of market tops.

And yet another factor:

Nvidia is now buying and selling on the NASDAQ like a Blinder & Robinson penny inventory from the 80s, all on the obvious foundation of “AI is the following massive factor and Nvidia
NVDA
chips are absolute pie within the sky!”

Up 250% from its October lows (7 months in the past!), the NASDAQ-100’s favourite element trades with a price-earnings ratio of 223, a price-sales ratio of 40 and at 43 instances its ebook worth. The Shiller p/e for the S&P 500 sits at 30.

Right here’s the every day worth chart:

The red-circled hole space represents the purpose at which merchants misplaced their minds. That is the bubbliest of the bubble insanity now happening within the tech sector, not essentially signaling any type of precise prime, however we’re closing in on one with this “can’t take away my finger from the purchase button” habits.

Add up all the above and also you’ve acquired a market prime or topping.