Edition 0010. 04.03.2022. Week of 03.28 - 04.03.2022

This weekly commentary examines the 10 largest companies, by market capitalization, affectionately called The Generals, that are part of the S&P 500. We analyze size, price, trend, momentum, and breadth. By having an in-depth understanding of what The Generals are doing this should help us understand what the S&P 500 is doing.

__The General's Market Capitalization & Trend Table.__

__Click here for a guide to the subjective trend.__ Click the performance table to enlarge.

Last week The Generals grew from 29.42% of SPY’s market cap to 29.47%. TSLA overtook GOOGL for 5th largest company in the S&P 500. SPY’s market cap that is in a quantitative uptrend increased from 18.37% to 24.40% with MSFT being upgraded from range to uptrend as price remounted its upward sloping 40-week simple moving average of closes.

Source of the weight data: https://www.barchart.com/etfs-funds/quotes/SPY/constituents

__Overview.__

#### Performance table sorted by the 1-week rate-of-change.

__Click here for the performance table guide.__ Click the performance table to enlarge.

Last week 3 of The Generals outperformed SPY. Those were TSLA, MSFT, and FB. On average, the Generals gained 0.24% last week, while SPY only gained 0.05%. TSLA closed to record a 13-week closing high, while MSFT and FB closed at 4-week highs. The quantitative trend of MSFT was upgraded from range to uptrend. The quantitative momentum of GOOG was upgraded from negative to neutral. UNH and BRK.B remain the only two Generals in an uptrend with a positive momentum condition as judged by our quantitative model. 8 of our generals have their 6-week moving averages of their 40-week moving averages of relative strength of SPY sloping upwards.

#### Year-to-date performance chart.

Click to enlarge.

BRK.B was the only General in positive territory for most of this year-to-date. Two weeks ago UNH joined BRK.B in positive territory. Last week TSLA rocketed higher to climb from 7th position to 2nd position. TSLA is now in positive territory with a YTD gain. FB continues to lag.

#### The Generals geometric average and relative strength.

Click to enlarge.

The middle panel is a geometric average of the top 16 companies, by cap-weight, in the S&P 500. This is to avoid having to recalculate the average every time the bottom spots switch. The geometric average is a form of weighting that minimizes the impact of the highest priced stocks on the average itself. The bottom panel is the relative strength chart which shows The General’s Geometric Average divided by SPY. The top panel is its momentum using a 10 period Relative Strength Index.

The Generals geometric average has made a higher-high after a lower-low, so price is in a trading range above its upward sloping 40-week simple moving average. The relative strength line against SPY has come back up to its previous high showing strength, but is also in a range. RSI has bottomed just above 32, so we will need to see a push above 60 if we want to confirm a bullish rotation.

#### The Generals geometric average and advance-decline data.

Click to enlarge.

The top panel is the same geometric average from above. The middle panel is the cumulative advance decline line which, in this case, is measuring weekly advancers minus decliners to determine the net advancers. The net advancers are then summed to form the cumulative advance-decline line. The bottom panel, called the advance-decline percentage, shows the percent of net advancers as histogram bars. The line is a 10-week simple moving average of the net advancers histogram. We can use this to show breadth thrusts, and we can also judge the strength of the underlying 16 stocks.

The cumulative AD line made a higher-high after a lower-low and now rangebound just like The Generals' geometric average. 37.50% of The Generals advanced last week, so 6 of 16. The 10-week moving average of the AD% indicator has moved up from 47.5% to 50% but remains in its neutral zone between 40%-60%.

#### The Generals geometric average with percentage above moving average data. Click to enlarge.

This top panel shows The Generals Geometric average, explained above, with its 10-week simple moving average in blue and its 40-week simple moving average in red. The middle panel shows the percentage of stocks above their 10-week moving averages. The bottom panel shows the percentage of stocks above their 40-week simple moving averages.

The number of Generals above their 10-week simple moving averages has increased from 75% to 81.25% or 13 of 16. The number of Generals above their 40-week simple moving averages has increased from 62.50% to 75% or 12 of 16.

__The Charts__

Note: Goog and Googl are very similar, and until there is a change, the analysis of Goog represents both charts.

**Apple. Click to enlarge. **

AAPL lost 0.23% in value last week. Price has yet to make it back to its all-time high just under $183. Price remains above its upward sloping 40-week simple moving average. A measured move using the flag pole projects a price target of $214, while the next Fibonacci extension is up at $263. Momentum is turning up to test its average line from below. AAPL bulls would like to see Price get above its all-time high and momentum to break back above its upward sloping trendline. Relative strength remains stable above its breakout level. Apple is in an uptrend.

**MSFT. Click to enlarge.**

MSFT gained 1.89% in value last week. Price continued higher and has remounted its upward sloping 40-week simple moving average in its descending wedge pattern. Price closed at a 4-week high. Momentum is negative though accelerating towards the upside to test the 0-line and average line from below 0. Relative strength remains coiling around its rising 6-week moving average of its 40-week simple moving average. MSFT remains consolidating in an uptrend.

**Alphabet. Click to enlarge.**

Goog lost 0.58% in value last week. Price remains above its upward sloping 40-week simple moving average. Momentum has broken above its 0-line and is testing its average line from below. Relative strength continues to coil and oscillate around its upward sloping 6-week average of its 40-week moving average and trend line. Goog is in a consolidation box in an uptrend.

**Amazon. Click to enlarge.**

Amazon lost 0.74% in value and has closed for the 14th week in a row below its downward sloping 40-week simple moving average. Price remains between the $3,552.25 and $2,871.00 levels which define its year and a half long trading range. Momentum is above its downward sloping average line but still under 0. Relative strength remains trending upwards while below its downward sloping 6-week moving average of its 40-week moving average. AMZN is rangebound.

**Tesla. Click to enlarge.**

TSLA gained 7.32% in value and led The Generals higher for a 2nd week in a row. Price remains above $900 and below 1,243.50 while the 40-week simple moving average of price remains sloping upward. Price recorded a 13-week closing high. Momentum has turned up from its 0-line and is now testing its average line from below while above 0. Relative strength continues higher and is at multi-month highs. TSLA is rangebound.

**Meta Platforms. Click to enlarge.**

FB gained 1.37% in value last week. Price remains above $207. Momentum has flattened out and is accelerating to the upside, slightly. Relative strength remains near all-time lows as it tests it downward sloping trendline from below. FB remains in a downtrend.

**Nvidia. Click to enlarge.**

NVDA lost 3.54% in value last week. Price remains above its still upward sloping 40-week simple moving average. A measured move projects a target of $406 while the next Fibonacci extension level is $312 and then $414. Momentum has made a stand at its 0-line and is breaking above its downward sloping trendline. Now it looks ready to test its average line from below. Relative strength is above its upward sloping 6-week moving average of its 40-week simple moving average. NVDA remains in an uptrend.

**Berkshire Hathaway. Click to enlarge.**

The famed Berkshire Hathaway lost 1.92% in value last week. In a change from 5 consecutive weeks of all-time closing highs, we see a candlestick pattern called the Dark Cloud Cover has formed. The psychology of this candle pattern speaks to the probabilities of some mean reversion to follow in the week(s) ahead. Momentum and relative strength remain above their upward sloping trendlines. Price is in an uptrend.

### UnitedHealth Group. **Click to enlarge.**

UNH lost 0.09% in value last week. A measured move out of the last rectangle projects a price target of $572, while the Fibonacci extensions project a move to $651 if price can closed above $523. Momentum and relative strength remain above their upward sloping trendlines. Price is in an uptrend.

__Conclusion__

While several of The Generals are in consolidation patterns, these patterns are forming in uptrends. This is bullish for the S&P 500 as a whole and suggests continuation. That said, this analysis does not consider anything except the 10 largest companies. It does not consider overall market breadth, sentiment, or the macro-economic forces at work.

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