About a year ago, I detected a fundamental shift in a few names that I felt might give us clues as to where we’re going. I want to revisit that thought today.
What you saw in that tweet is a breakout that may signal a major shift in the economy as we’ve known it. Perhaps it is a shift in the nature of globalization brought on by the pandemic.
But, in each of these cases, these major US manufacturers all did something interesting. Their stocks have been in declines in some cases for decades but then that may have now all of sudden changed. It appears to me that they have all broken trend. Their trends have been down, and they have been so during the long period of the decline of US manufacturing. However, if their trends have now changed (institutions know what’s coming before we do, and they play the long game), then perhaps the decline of US manufacturing is also changing.
$GM, despite not quite looking like it’s been in a downtrend, it is, in a phantom way, as their shares pre-GFC were in the 70’s. That said, the rally from the COVID lows is the first time it’s produced a strong impulse wave in many, many years. And, it’s returned to the 61.8% retracement of that advance, which makes it an excellent candidate for a wave “2.”
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