Breakdown in Mega Cap Growth Confirms Bear Phase!

While the S&P 500 and Nasdaq showed incredible strength in Q1, breadth conditions have been deteriorating since mid-March. The equity benchmarks had been propped up by mega cap growth stocks still trending higher, but with recent breakdowns in some of the strongest charts, we may be entering a new bear phase for stocks. Today we'll break down the charts of AAPL, TSLA, SMCI, MSTR, NFLX, and AMZN, and show how this could mean much further pain in store for investors!
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Dave helps active investors and financial advisors make more informed investment decisions, inject more discipline into their investment process, and enrich relationships with their clients. Feel better about making better decisions!
Dave is the Chief Market Strategist at StockCharts.com, where he helps investors minimize behavioral biases through technical analysis. He is a frequent host on StockCharts TV, and he relates mindfulness techniques to investor decision making in his blog, The Mindful Investor.
He's also President and Chief Strategist at Sierra Alpha Research LLC, a boutique investment research and consulting firm focused on managing risk through market awareness. He combines the strengths of technical analysis, behavioral finance, and data visualization to identify investment opportunities and enrich relationships between advisors and clients.
Dave was previously a Managing Director of Research for Fidelity Investments in Boston, a Past President of the Chartered Market Technician (CMT) Association, and started in the financial industry just after the March 2000 market top at Bloomberg in New York.
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[@robdallen7267]

Totally agree concentration on mag 7 are 40% on Spx 500. Apple 150, Tesla 125, google 140,Nvda 685, Amzn 157 and msft 360 very possible. 4500 coming

[@DKellerCMT]

4500 getting closer by the week!! D

[@jmr152]

Your dedication and long hours are a gift to those of us who don't have that ability and we're the ones profiting by it. I continue to learn every day from you. Thank you, Dave, for everything you do. Love your videos! I never miss a one. HAGW 😊

[@DKellerCMT]

Really appreciate these very kind words!! D

[@steverentschler1616]

I think it's premature to suggest that we are in a confirmed bear phase when the market has a flash crash. I would wait till there is more evidence of continued downtrend. This would mark the shortest bull market if that happens, which is unlikely.

[@DKellerCMT]

Not sure I'd describe recent events as a flash crash, but you make a fair point on being patient! D

[@eminalopatyuk6812]

Thank you.

[@DKellerCMT]

Thanks so much for watching! D

[@pezzodipunto2239]

Good analysis and observations Dave. No point IMO in predicting where this pull back or correction (or more if needed) will take us, there are some obvious areas of potential support and AVWAP's to keep an eye on. Now is the time to get ready for when things eventually turn back up but its important we see the down trend reverse again and to not act on anticipation of assumed support levels, in the words of the great Brian Shannon: Dont buy the dip, buy strength after the dip.

[@DKellerCMT]

Would not disagree with Brian's sentiment at all! I always describe it as looking for "signs of accumulation" and I do not see them today! D

[@user-dc3ie8wy8l]

Enjoyed your show. You could always use the fantastic four like the comic superhero.

[@DKellerCMT]

Love the FF reference, well done! D

[@youyou-dv8fr]

Hope you feel better from a cold.

[@DKellerCMT]

You and me both!! D

[@jasonsmith6572]

We ❤ Dave!

[@DKellerCMT]

Appreciate that J!! D

[@gigrockband]

The Crazy Cuatro.

[@DKellerCMT]

Oh that's good. D

[@dorothymoller566]

Certainly can’t quibble with your characterization of what’s happened with the mega caps. But, does not explain explosive breakdown across the broader market. I know, I for one, am broadly invested in quality stocks and judiciously monitor RSI, money flows, divergences, etc. In spite of that, literally every one of my holdings across multiple industries experienced 5+% drops two days in a row. Note that none of my holdings was in overbought territory. I can’t help feeling that a convergence of factors - Fed speak re. interest rates, Middle East tension, options expiration, and bitcoin halving have all converged to foster a brutal, rapid downturn. It seems that the rapid decline in the number of issues below their averages confirms that. Thoughts?

[@DKellerCMT]

I would agree- all those other things have been happening. I think mega cap growth holding up was a big change last week. D

[@daveyvane9431]

The 4 winds

[@DKellerCMT]

ooooooo this is indeed a new one! Thanks for that D

[@vishal76i9]

How much time one should spend on chart's? Thank you

[@DKellerCMT]

That's a great question, and honestly that very much depends on your investment horizon, how actively you trade, etc. For me, having a dedicated time each morning ("The Morning Coffee Routine") has been a game changer for me! D

[@vishal76i9]

Thank you for answering i think I was overdoing.

[@andrewweis5857]

Wow, talk about unambiguous, there’s a clean breakdown in that NFLX chart we don’t have to guess about and it’s not good! Leadership failure, you’re right on it.

[@DKellerCMT]

Agreed!! D

[@DarkBullCapital]

do you see any dead cat bounce any time soon?

[@steverentschler1616]

No, the market is going straight down, do not pass go, do not collect $200

[@DKellerCMT]

If there is one certainty in any bear phase, it's that we will see bear market rallies. Sudden and seductive! D

[@johncughlin]

Hello do you run a discord community?

[@DKellerCMT]

I definitely do not run a discord community. D

[@greggorjk8100]

Maybe the Fed shouldn't have made promises that they, J Powel, couldn't keep, sure hope we don't have to return to the Oct'23 highs to find our fair market value without rate cuts, sigh

[@DKellerCMT]

You and me both! D

[@aperson1181]

Dave, I sent an email to your subscriptions email about subscribing but from my personal email. never heard back, I am following up now as well, please reply.

[@DKellerCMT]

Thanks for the e-mail will make sure you get a response ASAP! D

[@mmm-cake]

Send it to zero

[@DKellerCMT]

Let's hope conditions to become that dire!! D

[@dr.mikejohnson571]

EXCELLENT analysis and thanks 😊🙏😊 However Shocked u don't mention Nvidia 😳😳🤔🤔😊😊

[@DKellerCMT]

Appreciate that! NVDA didn't make the cut for this video, but semis are front and center for sure. D