24-12-13 Climatic Behavior is becoming more frequent, nearing the top of the rising channel

Weekly charts for the S&P 500, Nasdaq Composite, and Russell 2000 show that the indices have diverged significantly from their 10-week moving averages (10-WMA) and 40-week moving averages (40-WMA). Among the three major indices, the S&P 500 and Russell 2000 are close to the highs of their rising channels over roughly the past year, while the Nasdaq still has a few percentage points of room before reaching a possible channel top.

S&P It has been in a clear rising channel for roughly 18 months, and the current price is near the top of that channel, In terms of deviation from moving averages, The index is currently about 3.4% and 10.7% above its 10-week moving average (10-WMA) and 40-week moving average (40-WMA), respectively. In 2023/12, the index was at one point 6% above its 10-day moving average (10-DMA), and in 2024/3 it was 13% above its 40-week moving average; these are useful comparisons.

Nasdaq The current weekly close is 6% above the 10-week moving average (10-WMA) and 13% above the 40-week moving average (40-WMA). In 2023/6, the index once deviated 8% from its 10-week moving average; in 2023/7, its deviation from the 40-week moving average was 19%. The current overbought condition is significant, but still has some room compared with historical extremes.

Russell 2000 After touching the top of its rising channel last week, it stalled, indicating that the index is nearing short-term resistance and its technical upside may be limited. The current close is 6% above the 10-week moving average (10-WMA) and 13% above the 40-week moving average (40-WMA). Since the bull market began, extreme deviations of this magnitude have reached 12% above the 10-week moving average (2023/12) and 13%-14% above the 40-week moving average (seen twice in the past two weeks). Similarly, although the current deviation is high, it remains within the range of historical extremes.

At the micro level, some clear Climatic Behavior has also appeared in the market recently. This is a common topping signal late in a bull market. Among stocks with market capitalizations above 50 hundred million dollars, 35 stocks are currently at least 60% above their 200-day moving average and more than 25% above a recent valid Pivot Point.Although some of them (such as UPST and NBIS) lack a clear Pivot Point, these stocks gained close to 8% on average last week. The strongest performers included SOUN、DOCU、CRDO and APP。

The following stocks have shown typical “climax top” signals:APP、CRDO、PLTR、MSTR、FNMAS、UI and HIMS. Some of them show several types of “Climatic Behavior”, including volume surges, prices far above moving averages, and exhaustion gaps.

Among stocks with market capitalizations between 5 hundred million and 50 hundred million dollars, 60 stocks are currently at least 60% above their 200-day moving average (200-DMA) and above a recent valid Pivot Point by at least 25%. Although some stocks (such as QUBT and QBTS) lack a clear Pivot Point and were excluded from the statistics, these stocks remain significantly overbought. Despite a pullback in small-cap indices last week, these stocks still gained close to 5% on average, with KC、PRCH and BBAI and other stocks posting particularly strong gains.

Among these 60 stocks, the following have shown typical Climax Top characteristics:EDN、SEI、RDW、PRTH、NGVC、AVPT、BBAR、RVLV、BLND、WWW。

The market is in a late-stage acceleration phase, and topping signals are gradually increasing. Against a backdrop of no new base formations, a decline in market activity may be a precursor to a potential correction.