Edition 0005. 02.26.2022.

This weekly commentary examines the 10 largest companies, by market capitalization, affectionately called The Generals, in the S&P 500. We analyze performance, price, trend, momentum, and breadth. By having an in-depth understanding of what The Generals are doing, it should help us to understand what is next for the S&P 500 as a whole.

We start with performance tables that allow us to track how the symbols have performed over several rolling periods of time. We can see New high/low details, as well as determine trend and momentum using quantitative measures. Here are a few notes to help you interpret the tables.

They are grouped first by family, and then sorted by performance.

Quantitatively, the general trend is determined by price in relation to its 40-week simple moving average. 1 means the trend is up. 2 means the trend is vulnerable. 3 means the trend is down.

1 = close is above the ma and the ma is up.

2 = close is below the ma and the ma is up, close is above a flat or ma that is down.

3 = close is below the ma and the ma is down.

Quantitatively, the general momentum condition is determined by a 12,26,09 Price Percentage Oscillator – think MACD. 1 means the momentum condition is positive. 2 means the momentum condition is positive but decelerating. 3 means the momentum condition is negative but accelerating. 4 means the momentum condition is negative.

1 = the oscillator is above 0 and the histogram is above 0.

2 = the oscillator is above 0 but the histogram is below 0

3 = the oscillator is below 0 but the histogram is above 0.

4 = the oscillator is below 0 and the histogram is below 0.

The ranking of closing highs and lows is as follows:

1 = 4-week closing high or low.

2 = 13-week closing high or low.

3 = 52-week closing high or low.

4 = all-time closing high or low.

The 40-week SMA of relative strength to SPY is as follows:

1 = 40-week SMA is up.

2 = 40-week SMA is same.

3 = 40-week SMA is down.

## The General's Market Capitalizations

No changes to the rankings last week, though note that UNH is tied with JPM at 1.18% of market cap. I have included the chart, though it is not included in the breadth measures.

## Overview.

__Performance table sorted by the 1-week rate-of-change.__

Last week was a good week for the Generals. They, on average, gained 0.62% in value. Microsoft, Alphabet, and Nvidia led the gains. Even Meta Platforms join ed the party after 3 consecutive weeks of retreating.

On the quantitative front, Tesla has changed its trend from positive to neutral. Apple closed at a 4-week low while Tesla closed at a 13-week low. Berkshire Hathaway, the only General to show a year-to-date gain, made a 4-week closing high. 7 of out 10 generals have a rising 40-week simple moving average of relative strength against SPY.

__Relative performance chart. This shows the year-to-date performance in a more visual way.__

The year-to-date picture remains largely unchanged.

__The Generals geometric average and relative strength.__

The middle panel is a geometric average of the 10 generals. 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 General’s Geometric Average divided by SPY. The top panel is its momentum using a 12,26,09 Percentage Price Oscillator.

We can see that the Generals average has made a lower-low, a lower-high, and has now put in a lower low below its still rising 40-week simple moving average. Momentum is nearing its 0-line. Relative strength is also breaking down and the RS line is below its upward sloping 40-week simple moving average.

__The Generals geometric average and advance-decline data.__

The top panel is a geometric average of the 10 generals. The middle panel is the cumulative advance decline line which, in this case, is measuring weekly advancers minus decliners to get 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 10 stocks.

The cumulative advance-decline line has broken below its coil and turned up above its upward sloping 40-week simple moving average from above. 70% of the Generals advanced last week, and the 10-week simple moving average of the advance-decline percentage is still sitting in between 40% and 60% as the index is continues to show indecision being below its upward sloping 40-week simple moving average.

__The Generals geometric average with percentage above moving average data. __

This next chart shows The Generals Geometric average 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 shading turns red when the percentage drops to 50% or less.

We can see that the Generals average has broken below its upward sloping 40-week simple moving average and has made a lower-low. The middle panel shows us that only 10%, so 1 out of 10, generals are above their 10-week simple moving averages. The bottom panel has declined to 30%, meaning 3 of 10 Generals are above their 40-week simple moving averages.

## The Charts

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

### Apple

Apple remains in an uptrend with price above its rising 40-week simple moving average. Momentum is testing its upward sloping trendline. Relative strength remains above its December 2021 breakout level.

MSFT

Microsoft closed below its upward sloping 40-week simple moving average for the first time in almost two years just 3 week ago. It has remained below it since. Momentum decelerated though is very close to its 0-line. Relative strength remains in a coil pattern above its upward sloping 40-week simple moving average of relative strength. Microsoft is rangebound.

### Alphabet

Goog remains below its upward sloping 40-week simple moving average. Momentum is touching its 0-line, so next week is very important for momentum. Relative strength has been improving for the last few weeks and RS is testing its upward sloping 40-week simple moving average from below. Alphabet is rangebound.

### Amazon

Amazon closed, for the 9th week in a row, below its now downward sloping 40-week simple moving average. Momentum is decelerating thought negative. Relative strength remains flat below a downward sloping 40-week simple moving average. Amazon remains rangebound.

### Tesla

Tesla close below its upward sloping 40-week simple moving average. Price being below $900 points to the price action in late 2021 being a false breakout, though there is always a chance it will morph into a premature breakout instead. Momentum is accelerating towards its 0-line. Relative strength is breaking down and testing its upward sloping 40-week simple moving average. TSLA remains rangebound.

### Meta Platforms

Meta Platforms did have a positive week. Buyers stepped in around the $200 level which was resistance in July 2019. Momentum is negative and so is relative strength. FB remains in a downtrend.

### Nvidia

Nvidia is holding up really nicely. Price has been above its upward sloping 40-week simple moving average since July 2019. Momentum is decelerating as it approaches its 0-line. Relative strength is breaking above its downward sloping trendline, and hopefully leading both price and momentum into an upside resolution. NVDA remains in an uptrend.

### Berkshire Hathaway

The famed Berkshire Hathaway is our only General in a confirmed uptrend with a positive momentum condition according to our quantitative measures. Price is consolidating above the $295 breakout level above its upward sloping 40-week simple moving average. Momentum is positive. Relative strength is holding its breakout level. BRK.B is in an uptrend.

### J.P Morgan Chase & Co.

JPM closed just above its upward sloping trendline that has held since the March 2020 Covid low. Price is however below its downward sloping 40-week simple moving average. Momentum is negative. Relative strength is below its downward sloping 40-week simple moving average. JPM remains rangebound.

### UnitedHealth Group

## Conclusion

The Generals as a group are losing strength against the S&P 500. The majority of momentum remains questionable, and only 1 general is positive this year-to-date. That said, Apple, Microsoft, Alphabet, Nvidia and Berkshire Hathaway are still in a position for another leg up should buyers step in.

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