03-02-2021, 02:16 PM
Even though this sector remains in a relative uptrend, the ADX of the relative performance ratio began to roll over in late 2017. The weakness in trend culminated in the recent carnage of FANG and semiconductor trendy boutique s. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 is shown below. EM relative performance began to falter in late 2017, and relative strength has been rolling over. The chart below shows the relative performance of technology stocks compared to the market. A prolonged period of market performance may be in store, much in the manner of Microsoft after its anti-trust battle with the Justice Department. The "last hurrah" scenario that I recently outlined (see How the equity bulls and bears may both be right) is playing out more or less as expected. The enthusiasm for technology stocks may be overdone, as the sector has exceeded its weight in the SPX index, which last peaked during the NASDAQ Bubble. The SPX has formed a bullish cup and handle breakout with an upside target in the 2925-2960 range.
The SPX recently breached an uptrend line, and its ADX has also rolled over. The Average Direction Index (ADX) is a trend indicator developed by J.Wells Wilder to measure the strength of a price trend. Which indicator should you believe? History shows that the lumber/gold ratio has been an excellent indicator of risk appetite. The bottom panel of the accompanying chart shows the rolling correlation of the lumber/gold ratio (cyclical indicator) to the stock/bond ratio (risk appetite indicator). The lumber/gold ratio is rising, which is a buy signal for risky assets. The copper/gold ratio is telling a story of economic softness. Consider the copper/gold ratio, which is another cyclical indicator based on a similar theme. This is because stock markets are leading indicator. This would indicate that a recession would occur in Q4 2019. As stock prices tend to be forward looking, the combination of bearish technical readings and weakness in long leading indicators suggest that a market top is forming about now. These conditions suggest that stock prices will make a "last hurrah" rally. Presently we realize that stock value development has no specific example yet this hypothesis challenges that rationale and states that it is conceivable to foresee and diagram any stock's value development.
Related articles:
https://valentineformyvalentine.agr.ng/
The SPX recently breached an uptrend line, and its ADX has also rolled over. The Average Direction Index (ADX) is a trend indicator developed by J.Wells Wilder to measure the strength of a price trend. Which indicator should you believe? History shows that the lumber/gold ratio has been an excellent indicator of risk appetite. The bottom panel of the accompanying chart shows the rolling correlation of the lumber/gold ratio (cyclical indicator) to the stock/bond ratio (risk appetite indicator). The lumber/gold ratio is rising, which is a buy signal for risky assets. The copper/gold ratio is telling a story of economic softness. Consider the copper/gold ratio, which is another cyclical indicator based on a similar theme. This is because stock markets are leading indicator. This would indicate that a recession would occur in Q4 2019. As stock prices tend to be forward looking, the combination of bearish technical readings and weakness in long leading indicators suggest that a market top is forming about now. These conditions suggest that stock prices will make a "last hurrah" rally. Presently we realize that stock value development has no specific example yet this hypothesis challenges that rationale and states that it is conceivable to foresee and diagram any stock's value development.
Related articles:
https://valentineformyvalentine.agr.ng/