Edition 0009. 03.26.2022. Week of 03.21 - 03.27.2022
This weekly commentary examines the 10 largest companies, by market capitalization, affectionately called The Generals, in the S&P 500. We analyze size, price, trend, momentum, and breadth. By having an in-depth understanding of what The Generals are doing will 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 28.28% of SPY’s market cap to 29.42%. TSLA overtook GOOGL as the 5th largest company and NVDA overtook BRK.B as 7th largest company. SPY’s market cap that is in a quantitative uptrend increased from 13.14% to 18.37% TSLA changed from down to up. The cap of the quantitative downtrend increased from 4.95% to 5.08%. The subjective trend has changed from 3.26% to 11.86% in an uptrend as AAPL and UNH were upgraded from range to uptrend.
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 The Generals, on average, outperformed SPY. The Generals gained 4.22% while SPY gained 1.84%. All of our generals are made new 4-week closing highs except for UNH and BRK.B which closed at new all-time highs. Both of those generals are also the only two in a quantitative uptrend with a positive momentum condition.
Year-to-date performance chart. Click to enlarge.
Year-to-Date we have UNH join BRK.B in positive territory. 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 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 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 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. 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 geometric average of the top 16 companies by weight. 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 16 stocks.
The cumulative AD line made a higher-high after a lower-low and now rangebound just like The Generals geometric average. 87.5% of The Generals advanced last week so 14 of 16. The moving average of the AD% indicator is at 47.5% meaning it is back in dull zone of 40-60%.
The Generals geometric average with percentage above moving average data. Click to enlarge.
This 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 number of Generals above their 10-week simple moving averages has increased to 75% or 12 of 16. The number of Generals above their 40-week simple moving averages has increased to 62.50% or 10 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 gained 6.35% in value last week. Price is blasting higher and has broken above its falling channel and now headed to test its all-time high just under $183. Price has closed above its upward sloping 40-week simple moving average. A measured move projects a price target of $214 while the next Fibonacci extension is up at $263 for an alternative or secondary target. Momentum is turning up to test its average line from below. Relative strength has confirmed its breakout level and previous resistance as support. Apple is in an uptrend.
MSFT. Click to enlarge.
MSFT gained 1.08% last week. Price remains above the $280 level, its October 2021 low, but remains below its rising 40-week simple moving average in a descending wedge pattern. Momentum is negative though decelerating. Relative strength remains coiling around its rising 40-week simple moving average. MSFT is rangebound.
Alphabet. Click to enlarge.
Goog gained 3.45% last week. Price is in-line with its upward sloping 40-week simple moving average. Momentum is below its 0-line though turning up to test its average line. Relative strength remains above its still upward sloping 40-week simple moving average and trend line. Goog is rangebound.
Amazon. Click to enlarge.
Amazon gained 2.18% in value. closed for the 13th week in a row below its downward sloping 40-week simple moving average. Price remains between the $3,552.25 and $2,871 levels which define its year and a half trading range. Momentum is testing its average line from below under 0. Relative strength remains trending upwards below its downward sloping 40-week simple moving average. AMZN is rangebound.
Tesla. Click to enlarge.
TSLA gained 11.62% and led The Generals higher. Price has closed above the key $900 level and closed above its upward sloping 40-week simple moving average confirmig the bullish engulfing candle from two-weeks ago. Momentum continues to make a stand at its 0-line. Relative strength found support at its upward sloping 40-week simple moving average and has now broken its downward sloping trendline from below. TSLA is rangebound.
Meta Platforms. Click to enlarge.
FB gained 2.46% last week. Price has confirmed that tweezers engulfing pattern by closing last week higher. Price is back above $207. It is progress. Momentum is very negative and relative strength remains near multi-year lows. FB remains in a downtrend.
Nvidia. Click to enlarge.
NVDA gained 4.68% in value last week. Price has closed above its falling channel. 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 $414. Momentum has made a stand at its 0-line and is testing its average line and downward sloping trendline from below. Relative strength is above its upward sloping 40-week simple moving average. NVDA remains in an uptrend.
Berkshire Hathaway. Click to enlarge.
The famed Berkshire Hathaway gained 4.77% last week. It is also just one of two Generals that have a year-to-date gain. BRK.B is up 19.98$ YTD. It is also only one of two Generals in a quantitative uptrend with a positive momentum condition. Price is rocketing higher and has made an all-time closing high. Momentum is positive and confirming the high. Relative strength remains above its breakout level and above its upward sloping 40-week simple moving average. Price is in an uptrend.
UnitedHealth Group. Click to enlarge.
UNH gained 1.37% last week and it’s close marked an all-time weekly closing high. A measured move projects a price target of $572, while the Fibonacci extensions project a move to $651. The momentum oscillator line closed above its average line and is pointing higher. Relative strength is above its upward sloping 40-week simple moving average and upward sloping trendline. Price is in an uptrend.
Conclusion
The Generals as whole had a terrific week and out performed SPY. The majority of the charts are rangebound, with two generals advancing to all-time weekly closing highs and in positive territory this year-to-date.
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