Market Leaders Breaking down at Multi-Year Resistance
It seems like I am always on the road when life gets interesting in the market. This is a post I had started a few weeks ago. I felt no urgency to get the post up because the time frames involves are a decade-plus, and the market topping process seemed to be playing out in slow motion. Last week slow motion turned to a rapid decline. But these charts have played out as indeed very meaningful (perhaps played out too quickly to be very useful now). Remember these charts were produced BEFORE last week’s meltdown (so last week’s drop is not included in these images), but it shows the resistance that the high-flying market leaders were up against. As you can, they could have a long, long way to fall yet.
Three of the biggest names in tech faced serious multi-year resistance: Amazon (AMZN), Netflix (NFLX) and Google (GOOG).
Obviously, the resistance proved meaningful for each of these stocks. The S&P and QQQ have broken down from bearish patterns. I think we have a good bit further to fall, though I have no idea how far or how fast. Fundamentally, I think there is still far too much liquidity stuck in markets with very small doors.
The treasuries (TLT) breakout that I noted weeks ago continues to look very healthy. It looks like it may remain a good place to find peace in the current market turbulence.