3 Little Indians Pattern + Divergence With Other Indices + More

11 de jul. de 2019

On a long time frame, we have a “three little Indian” pattern consisting of 3 peaks and 3 rivers. Expect accelerated selling once we return to the 2nd peak high buy institutions
From $3000 - $3047.38 (The 2008 Financial Crisis 2.618 Fib Retracement Level) I expect selling pressure to be heavy.

We have already fallen out of the most recent ascending wedge 2 days ago, in which we retested the previous support and have proceeded to trade down from there:


Divergence on the MACD histogram and the CMF was negative the entire way up.

This market traded up on the idea that bad news is good in hopes of a rate cut, completely ignoring the US and macroeconomic slowdown that has begun. That and trade tensions around the globe. Don't get me wrong, I love Trump, but if you think the Chinese will actually give the US a favorable trade deal you're wrong.

Here is the current weighting of the top 10 companies in the SPX (as of July 11, 2019):


Rank Company Ticker Weight (%) Price
1 Microsoft Corporation MSFT 4.249644 137.89
2 Apple Inc. AAPL 3.573786 202.46
3 Amazon.com Inc. AMZN 3.356436 2,007.59
4 Facebook Inc. Class A FB 1.959511 200.78
5 Berkshire Hathaway Inc. BRK.B 1.667792 213.36
6 Johnson & Johnson JNJ 1.508331 139.54
7 JPMorgan Chase & Co. JPM 1.474984 114.24
8 Alphabet Inc. Class C GOOG 1.406174 1,142.85
9 Alphabet Inc. Class A GOOGL 1.374452 1,142.67
10 Exxon Mobil Corporation XOM 1.319375 77.43
Total Weight of Top 10: 21.890485%


Weight from 12/31/2014 - 3/31/2019:

Ticker Company Name 3/31/2019 12/31/2018 12/31/2017 12/31/2016 12/31/2015 12/31/2014
MSFT Microsoft Corp. 3.83% 3.73% 2.89% 2.51% 2.48% 2.10%
AAPL Apple Inc. 3.60% 3.38% 3.81% 3.21% 3.28% 3.55%
AMZN Amazon.com Inc. 3.11% 2.93% 2.05% 1.54% 1.45% 0.65%
FB Facebook Inc. 1.68% 1.50% 1.85% 1.40% 1.33% 0.72%
BRK.B Berkshire Hathaway 1.65% 1.89% 1.67% 1.61% 1.38% 1.51%
JNJ Johnson & Johnson 1.58% 1.65% 1.65% 1.63% 1.59% 1.61%
GOOG Alphabet Inc. Class C 1.53% 1.52% 1.39% 1.19% 1.26% 0.85%
GOOGL Alphabet Inc. Class A 1.49% 1.49% 1.38% 1.22% 1.27% 0.84%
XOM Exxon Mobil Corp. 1.45% 1.37% 1.55% 1.94% 1.81% 2.16%
Total: 19.92% 19.46% 18.24% 16.25% 15.85% 13.99%



Data gathered from: slickcharts.com/sp500 & siblisresearch.com/data/weights-sp-500-companies/

Top put this into prospective here are some charts:

Dow Jones Transports/Dow Jones Industrial Average:


NYSE Composite:


Russell 2000:


WilShire 4500 Index:



No one can truly ever time the very top. It can definitely go higher, but please be careful when buying up here.

Best of Luck