Your Breakouts Are Failing

JC Parets
April 22, 2024

Have you counted how many stocks and sectors put in failed breakouts?

Market breadth has been deteriorating so fast that most of the "breakouts" that everyone was so excited about last quarter are all failing one by one.

It's pretty nasty out there.

That's what happens when you get aggressive and buy stocks while breadth is deteriorating in your face.

I've seen this too many times to get fooled again.

You're seeing a lot of first timers out there who haven't learned this yet.

One of the better examples is in the Equally-weighted S&P500. Look at this nasty failed breakout.

The question is whether or not the market-cap weighted version is going to follow it lower too.

Keep in mind that the largest component of the S&P500 is Technology, which has been completely falling apart.

So if the equally-weighted version already failed, should we expect the market-cap weighted version to fail as well?

We're seeing the same thing in the Nasdaq.

Look at the equally-weighted Nasdaq100 complete its failed breakout this week.

Keep in mind that Technology represents half of the market-cap weighted Nasdaq100.

With Technology turning into America's worst stocks, should we expect the Nasdaq100 to roll over too?

The stock market has gotten progressively worse since these 3 lines below stopped rising.

So if you're wondering when "risk on" is going to come back into the market, I think these 3 should be front and center:

We discussed what all these mean, and what we're doing about it, in our LIVE Conference Call this week.

ASC Premium Members can check that out here and download all the slides.

Give it a watch and then let me know what you think!

JC

 

 

Filed Under