Edition 0014. 05.15.2022. Week of 05.09 - 05.15.2022
This weekly commentary examines the 10 largest companies in the S&P 500, by market capitalization, affectionately called The Generals. We analyze size, price, trend, momentum, and breadth. Having an in-depth understanding of what The Generals are doing leads to information regarding what the army itself is doing, SPY.
Key Takeaways
Only Berkshire Hathaway is positive this year-to-date, though is fading.
The Generals continued to shirk as a percentage of SPY's market capitalization. They have gone from 29.47% to 28.71% to 27.97% 27.40% and now to 26.79% over the last six weeks.
TSLA fell from 4th largest to 6th largest. FB fell from 8th largest to 10th largest. UNH grabbed the 9th spot, growing from 10th.
Last week 3 of 10 Generals finished up for the week, those were GOOG, JNJ, and GOOGL.
There were more new lows than new highs.
In terms of relative strength, JNJ, BRK.B, and UNH are our leaders based on a 26-week lookback period.
There is significantly more market cap in downtrends than uptrends.
The General's Market Capitalization & Trend Table
Click here for a guide to the subjective trend. Click the performance table to enlarge.
Source of the weights 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 10 Generals finished up for the week, those were GOOG, JNJ, and GOOGL. These 3 Generals outperformed SPY, as did AMZN despite closing down on the week.
The new lows outnumber the new highs. AMZN closed at a 52-week low. BRK.B, MSFT, AAPL, and TSLA all printed 52-week closing lows. UNH a 5-week closing low.
In terms of relative strength, JNJ, BRK.B, and UNH are our leaders based on a 26-week lookback period.
Year-to-date performance chart.
Click to enlarge.
From year-to-date perspective, things are deteriorating. BRK.B was up about 20% in March. Since 03/25, its has fallen down to an only 3.80% gain this YTD. While it has given back the majority of its gains, it is certainly our performing SPY which is down 19.47% this YTD. UNH has given back all of its gains now and is back below 0. The laggard continues to be FB, though NVDA looks to be catching down.
The Generals geometric average and relative strength.
Click to enlarge.
Top Panel: momentum using Wilder's 10 period Relative Strength Index (RSI).
Middle Panel: a geometric average of the top 16 companies, by cap-weight, in the S&P 500. The geometric average is a form of weighting that minimizes the impact of the highest priced stocks on the average itself.
Bottom Panel: the relative strength chart. The General’s Geometric Average divided by SPY.
The Generals geometric average continued lower below its March 2022 low. Its 40-week simple moving average is now sloping downward. The first logical level of support is around $318. This is the 38.2% retracement from the March 2020 low to the December 2021 high.
The relative strength line, against SPY, has broken below its March 2022 lows Its 40-week simple moving average is now sloping downward. The double top is confirmed.
Since topping November 2021, the RSI has fallen below 40 and stayed below 60. Last week it closed below 30 confirming the weakness.
The Generals geometric average and advance-decline data.
Click to enlarge.
Top panel: same geometric average from above.
Middle panel: the cumulative advance decline line which sums weekly net advancers, advancers minus decliners.
Bottom panel: the advance-decline percentage shows the percent of net advancers as histogram bars with a 10-week simple moving average of the net advancers histogram. This shows breadth thrusts and the strength of the underlying stocks.
The cumulative AD line has broken below its March 2022 low and its 40-week simple moving average has turned down. Breaking below its March 2020 low makes the October 2021 low to the next logical level to watch.
Our net advancers reading has fallen to 25% meaning 4 of 16 Generals advanced last week. The 10-week simple moving average of The Generals advance-decline percentage has broken below the neutral territory between 60% and 40% and closed under 40%.
The Generals geometric average with percentage above moving average data. Click to enlarge.
Top panel: The Generals Geometric average with its 10-week (blue) and 40-week (red) simple moving averages.
Middle panel: percentage of generals above their 10-week simple moving averages.
Bottom panel: percentage of generals above their 40-week simple moving averages.
The number of generals above their 10-week simple moving averages has fallen to 6.25%, 1 of 16. The number of generals above the 40-week simple moving averages remains at 31.25%, 5 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 6.47% in value last week and underperformed SPY. Price printed a 13-week closing low. Price is below its upward sloping 40-week simple moving average. Price has closed below $154 and saw buying pressure just above $138 which has been a key level since August of 2020. Momentum is testing its 0-line from above. Relative strength is testing its breakout level from above. Apple is in a downtrend.
MSFT. Click to enlarge.
MSFT lost 4.95% in value last week and underperformed SPY. Price printed a 13-week closing low. Price has broken below its falling wedge and is testing its 38.2% retracement level. Momentum is decidedly negative. Relative strength has broken its coil to the downside, again, and now its smoothed moving averages has turned down. MSFT is in a downtrend.
Alphabet. Click to enlarge.
GOOG gained 0.74% in value last week and outperformed SPY. Price remains well below its downward sloping 40-week simple moving average. Price continues to test its 38.2% Fibonacci retracement level from the 2020 Covid-low to the November 2021 high. Momentum is negative, and relative strength remains below its smoothed 40-week simple moving average which is sloping downward. Goog is in a downtrend.
Amazon. Click to enlarge.
Amazon lost 1.5% in value last week and outperformed SPY. Price printed a 52-week closing low. Buyers stepped in at its pre-Covid price high. Momentum is negative. Relative strength is negative and making multi-year lows. AMZN is in a downtrend.
Tesla. Click to enlarge.
TSLA lost 11.10% in value last week and underperformed SPY. Price printed a 13-week closing low. Price is below Its upward sloping 40-week simple moving average and buyers stepped in around its 38.2% retracement level. Momentum is testing its 0-line from above. Relative strength was rejected twice from prior resistance and is not below its smoothed moving average. TSLA is in a downtrend.
Meta Platforms. Click to enlarge.
FB lost 2.53% in value last week and underperformed SPY. Price remains below $207 which has been an important level since 2019. Momentum and relative strength look to have stabilized, for now. Price is in a downtrend.
Nvidia. Click to enlarge.
No longer in the 10 ten largest companies.
Berkshire Hathaway. Click to enlarge.
The famed Berkshire Hathaway lost 2.67% in value last week and underperformed SPY. Price printed a 13-week closing low. Price has been falling for 7 consecutive weeks now, and price has broken its trendline from its March 2020 low. Momentum is declining, but still positive. Relative strength has been flat to down since price started to decline 7 weeks ago. BRK.B is rangebound.
UnitedHealth Group. Click to enlarge.
UNH lost 2.85% in value last week and underperformed SPY. Price printed a 5-week closing low. Price remains above its upward sloping 40-week simple moving average. Momentum has broken its upward sloping trendline, though is still positive. Relative strength remains strong above its upward sloping trendline. Price is rangebound.
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