Bulls, Bears, Hogs & Sheep - Time to take money off the table

Key Takeaways:

• ?US equities are currently in a strong upward trend.? However, moving averages-based trend signals are lagging indicators and increasing occurrence of red flags prompted a closer look at key stocks which accounts for c.40% of QQQ weighting.
• The analysis suggests key stocks like MSFT, GOOGL, AAPL, AMZN, TSLA, NVDA and AVGO have either put in significant tops or are extremely extended.
• Furthermore, an analysis of stocks vs. bonds relative performance implies a tactical overweight for bonds relative to equities, albeit at the expense of potential absolute performance.

QQQ is still trending strong but MA-based trend signals are lagging indicators.? Price action red flags deserve more attention and potentially action.? The current price action is at 1x Fibonacci extension with negative MACD divergence at +2x standard deviation levels.? The MACD uptrend line breakdown and lack of volume participation are also cause for concern.

8.6% weighting in the QQQ; MSFT is losing momentum inches away from the 1x Fibonacci extension level with negative MACD divergence and -1x standard deviation volume participation.

7.6% weighting in QQQ; It is easier to tell AAPL's story by zooming out.? The double top with a MACD negative divergence is evident.? The litmus test is if the double top neckline at c.$168 holds.? One theme to take note of China used to be a key revenue driver for AAPL, this love affair appears to be over with domestic Chinese favoring homegrown mobile brands amid reports of a -24% plunge in iPhone sales in China for the 1st 6 weeks of 2024.

5.2% weight in QQQ; Stock is at the tail end of a 5th upward impulse wave as MACD starts to negatively diverge from price action

4.4% weighting between the two share classes; Zoom out and GOOGL's double top and mother of all MACD divergence is readily apparent.? It is c.-21% to trend line support

6.3% weighting in the QQQ.? I think the most obvious statement to make in March 2024 is that NVDA's near-term momentum is likely to be tempered with a chance for a correction.?? In the last 3.25 years, a MACD reading of > +4x standard deviation translates to near-term consolidation and in the case of 2022, a significant correction.?? And that near vertical angle of attack on the most recent rally is simply unsustainable.?

2.4% weighting in the QQQ; Impulse waves are 5-waves structure in the direction of the main trend and corrective wave forms are generally 3-waves ABC structures; That would imply TSLA's main trend is negative as also implied by the MACD.? Ticking off the negative news flows, TSLA's Cybertruck is a dud, the company has not had a model refresh and is cutting prices while demand is sliding.? Demand is so weak that Mercedes, BMW and Toyota recently announced a slowdown in their EV transition plan.? It is so bad that TSLA biggest bull, Adam Jonas has recently taken down his estimates for TSLA.?

4.7% weighting in the QQQ; AVGO is an exercise in probability at this point with the stock heading into earnings with price action at 1.618x Fibonacci extension and a +2.2x standard deviation MACD which is bumping up against the upper boundary of a wedge.?

The current investment climate suggests an overweight in sovereign bonds relative to equities.? One may give up some absolute performance but there are only two ways this imbalance can resolve itself, rate cuts or an equity correction.?