Forget about the FANGs, it all about the FAAMG stocks. Most traders & investors are familiar with the term the ‘FANG’ stocks, an acronym for the high-performing tech stocks Facebook, Amazon, Netflix and Google. Why Netflix, with a market cap of only $60.15B is included instead of the much larger Microsoft (MSFT), which not only has a market cap over over 8x that of NFLX (502.6B) but is also one of the best performing & top-heavy components of the leading index, the Nasdaq 100 as well as one of the top components of the S%P 500 Index? I guess the word ‘FANGs’ has a cool ring to it when spewed out by the financial media or something along those lines.
Personally, I’ve been closely monitoring what can be referred to as the FAAMGs: Facebook, Apple, Amazon, Microsoft & Google as these are not only the 5 largest components of the leading index, the Nasdaq 100, but they have also lead both that index and to a lesser but still significant extend, the rest of the stock market to its recent highs, with all five of these stocks peaking well after all US stock indices (other than the $NDX, of which they account for the bulk of the returns) back on March 1st. In fact, 4 of these 5 market leading stocks only peaked (so far) as recently as this month with GOOG topping back in Mid-March but still not far off those highs at this time.
As such, I’m watching the current levels on each of these market leading stocks and in particular, a break below each of the highlighted key trendline support levels (although FB has already broken down & is currently backtesting its trendline from below) for the next major sell signal on the US stock market. Again, not one or two but all five of these stocks breaking down below those key support levels will be, at least IMO, the most objective & high probability sell signal on the US stock market in a very long time. With Options Expiration tomorrow & a fairly consistent pattern of the powers-that-be holding the market up into OpEx, my guess is that these trendline breaks could come as early as next week. Maybe, maybe not but something to watch for in the coming days & weeks.