Google At or Near Its End

Now let's look at the last of the FANG stocks, Google (Alphabet, ticker GOOGL).  I found that the quarterly bars chart and the monthly bars chart each sports a well fit TopFinder that is at or near its end.  Here's the quarterly bars chart...

 

This strongly accelerated up trend started in early 2011 and is currently about 98% complete.  Due to typical end of trend volatility, we consider anything greater than 95% to be essentially complete.  So, on this timeframe, this up trend has ended.

Now here's the monthly bars chart...

 

In this chart, there's some question as to which pullback(s) to fit the TopFinder to.  In my experience, fitting to the latest pullback works best.  Doing that here also captures an earlier pullback.  These fitting points are indicated by the small arrows.  So, I think this is a good fit.  

This TopFinder is almost 95% done, and we consider anything above 95% to be essentially done.  At the current rate of monthly trading volume it would take 3 or 4 more months to get to exactly 100%.  

So, my conclusion for Google is that its long term up trend is either done now or will end sometime between now and 3 or 4 months from now, assuming average monthly trading volume stays as it has been for the last several months.

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This ends my review of the FANG stocks and the Dow.  If we can generalize from these five to the whole market, the current long term market up trend will end sometime within the next 3 to 4 months, sooner if trading volume significantly increases.

Facebook - A Few More Months to Go

Resuming now our review of the FANG stocks, here's Facebook (FB).  I see that there are two different timeframe charts of FB which show TopFinders that are late in their lives, the monthly bars chart and the weekly bars chart.  Here's the long term monthly bars chart...

 

This accelerated uptrend started in mid 2013, having spawned a four-fold hierarchy of S curves (green), so it's late in its life.   

A TopFinder (TB-F) fits nicely to both the Aug. 2015 and the Dec. 2016 pullbacks, giving us confidence in its validity.  The fitting parameter D is at 41.8 billion shares of cumulative volume, and as of this writing the cum vol is 39.65 billion, so this trend is about 95% complete.  The dashed vertical line sits at the 41.8 billion share position, where we expect the trend will end.  If average monthly trading volume continues as it has for the last half year or so, then it will take 6 or 7 months to get to the end.  

Now, let's look at the weekly bars chart.  We see that since the end of 2016, price seems to be rising at a significantly greater rate than it was prior to that.  So, let's look at the weekly bars chart covering the past year...

 

Here we see price rising far above the lowest S curve (green), so this is a highly accelerated trend, now spawning a three-fold hierarchy of S curves.  To fit the TB-F to this trend requires D to be 5.6 billion shares of cum vol.  As of this writing, the cum vol is 4.11 billion shares, so this trend is about 73% done, projected to end at the dashed vertical line.  If we assume that average weekly trading volume continues at the rate it's been for the last half year or so, then it will take 4 or 5 months for this to end.  And of course, if trading volume increases it will end sooner, or later if trading slackens. 

So, we have the long term TB-F saying we've got 6 or 7 months to go and the intermediate term one saying 4 or 5 months.  Is this a problematic discrepancy?  Not really.  I've noticed that once a TB-F gets over 95% done, price action tends to become messy, and the end often comes somewhere between 95% and 105%.  At this point, we're getting a more accurate reading from the weekly bars TB-F.  And also, these time estimates vary with the average rate of trading volume.  We'll just have to keep watching these charts as these trends progress to their ends.

The Dow - A Few More Months to Run

Before finishing my review of the FANG stocks, let's look at the Dow Jones Industrial Average since the financial press is hyperventilating at every new high the Dow reaches, with lots of hand wringing as to when it's going to end.  Midas Analysis should give us insight as to how far along the Dow is in this strong up market.

Let's apply our analysis to DIA, the etf following the Dow.  Checking out charts of several timeframes, I see that the weekly bars chart of DIA here shows a well developed accelerated uptrend in progress...

 

 The uptrend started a year ago and has spawned a four-fold hierarchy of Midas support curves, S1 thru S4.  The price trend is riding far above S1, so this is an accelerated uptrend.  Four is the most common number of support curves in an accelerated uptrend before it ends, sometimes three or five, so this trend is well along in its life.   

Fitting the TopFinder (TB-F) to this trend at the April '17 pullback needs D to be 900 million shares of cumulative volume since its start.  As of this writing, the cum vol is 753 million, so this trend is about 84% complete in terms of cum vol.  The horizontal axis is linear in cum vol, not time, which allows me to position that dashed vertical line at the 900 million shares position, which is where we expect the trend will end.  We don't know when it will end or at what price, but we will see that it has ended once we get there.  If you assume that average weekly trading volume will continue as it has for the last several months, then the end of the trend will come in about three months.  If trading volume increases significantly, the end will arrive sooner; conversely if trading slows down, the end will come later.  

Netflix - A Few More Months to Run

Two months ago I started a review of the four FANG stocks (see my Aug. 9 post here) since they have been the leaders of this huge bull market we're in.  I'm looking at each one, on several timeframes, to see if Midas analysis can tell us how close each is to the end of its uptrend.  The Aug. 9 post showed that AMZN's uptrend, on the very long term timeframe of a quarterly bars chart, has ended.  Now, let's look at Netflix (NFLX).

Both the monthly bars and the weekly bars charts of NFLX show that it has been in a highly accelerated uptrend since July of 2016.  Here's the weekly bars chart...

 A TopFinder, TB-F, fits nicely to this trend using the fitting parameter D =  3 billion shares of cumulative volume.  To date, the cum vol from the beginning of this trend is 2.407 billion shares, so this trend is 80.2 % complete in terms of cum vol.  

Remember, this is a candlevolume display chart, so the horizontal axis is linear in cum vol, not time.  This allows me to position that dashed vertical line at the horizontal location which is 3 billion shares of cum vol since the trend's start.  This is the location where we expect the trend will end.  

In MetaStock, the charting program I'm using here, in candlevolume display it makes invalid assumptions on how to label the dates on the horizontal axis that are in the future, so you should ignore them.  

This chart does not give a prediction of when this trend will end, rather, it identifies what the cum vol will be when it ends.  In other words, we'll know when we get there.  IF, and this is a very big if, the average weekly trading volume stays the same as it has been for the last half year or so, then we could identify a date in the future when cum vol will get to 3 billion.  Just put a ruler on the chart, measure the distance from the latest price bar to the dashed vertical line, then measure that same distance back in time and you'll end up at about mid June of this year.  So, IF average trading volume remains as it has been this year, then we can expect this trend to end in about four months.  If trading volume increases significantly going forward, this trend will end sooner; and conversely if trading volume slows, this trend will take longer to end.  

A TopFinder also fits nicely to the monthly bars chart (not shown here) and leads to the same conclusions as on this weekly bars chart.

NASDAQ Showing Distribution

Using my Modified Volume-Price Trend (MVPT) indicator, I'm seeing distribution in the exchange traded funds that follow the NASDAQ Composite, ONEQ, and the NASDAQ 100, QQQ. 

The MVPT is a refinement of the Volume Price Trend (VPT) indicator, which in turn is a refinement of Granville's On-Balance Volume (OBV) indicator.  Both refinements reduce the noise and volatility of the OBV and keep the indicator close to the price trace in times of "normal" trading while allowing the indicator to diverge from price during phases of accumulation or distribution.  See my article, "Modified Price-Volume Trend Indicator" in the April 2010 issue of Stocks & Commodities magazine [Technical Analysis of Stocks & Commodities, vol. 28 no. 5, p22]. 

Here's the daily bars chart of ONEQ for the last 12 months, price in black candles and the MVPT in purple...

 

You can see that MVPT is in a dramatic downward divergence from price starting in May of this year.  

Similarly, here's the chart of QQQ...

Here the divergence is even more dramatic.  

What does this mean?  The usual interpretation is that the "smart" money is getting out of the stock even while the price continues to rise.  Usually this foretells a coming drop in the price, but without knowing when that will happen.  See my article for a full discussion of these behaviors.

I've looked at the ETFs following other market indexes.  Some, such as the SPY, show modest distribution, but none as dramatic as these two.