Berkshire Hathaway is sitting on a staggering $157.2 billion in cash, the highest amount since 1991. This immense cash reserve raises eyebrows, especially when you consider the troubling divergence between the S&P 500 and most market breadth indicators. The S&P 500 shows some of the worst breadth unconfirmed highs, even worse than those in 2020 and 2022. Meanwhile, the year-over-year change in full-time employment has been decreasing for the past three months.
But don’t worry, because, “this time is different,” right?
The market dislocation is a glaring warning sign. The Dow Jones is dropping, while the Nasdaq is climbing, and the Dow Transports are also falling. Historically, when the yield curve steepens from inverted levels, recessions tend to follow. This will be a critical signal to monitor in 2024.
Just think back to those who thought the $CSCO craze couldn’t be repeated. Well, “vertical” is what follows “parabolic,” and $NVDA has achieved that. Hopefully, it won’t be the pin that bursts the bubble. A technical bounce like the one seen on the 24th is typical after a bearish engulfing candle. Regardless of whether there’s green continuation on Tuesday, further decline is anticipated. Recent chart references highlight this.
Sources:
Berkshire Hathway is currently sitting on a record $157.2 billion in cash
This is THE highest cash level for the company since 1991 pic.twitter.com/5XEwWFSlLN
— Game of Trades (@GameofTrades_) May 24, 2024
Can't help but notice a major league bearish divergence between $SPX $QQQ and most market breadth indicators… pic.twitter.com/7Si3e4fRAP
— David Keller, CMT (@DKellerCMT) May 24, 2024
$SPX the worst breadth unconfirmed highs – worse than 2020 and 2022 highs pic.twitter.com/dqfEyPPdjs
— @mcm_ct_usa (@mcm_ct_usa) May 25, 2024
The YoY change in total (full-time) employment has been falling for the last three months.
don't worry tho… "this time is different" pic.twitter.com/pAHz6jbila
— Piker (@PikerCapital) May 25, 2024
*Nasdaq 📈
*Dow Jones 📉
*Dow Transports📉The dislocation is a major warning .🚨
Transports leading . Dow starts to follow .
Nasdaq next .
Wont be long pic.twitter.com/HukHQx8QPI
— The Great Martis (@great_martis) May 24, 2024
Yield curve steepening from inverted levels have systematically ended in recessions
This will be a key signal to monitor in 2024 pic.twitter.com/eKDxc8hb9j
— Game of Trades (@GameofTrades_) May 25, 2024
Imagine all those people who believed that $CSCO craziness could not have been replicated anymore…. well…. “vertical” is what comes after “parabolic” and $NVDA achieved that 🤭
Narrator: hopefully it isn’t the pin that pricks the bubble 🤞🏻 t.co/qPr4ghswn5 pic.twitter.com/G13uz14sZS
— JustDario 🏊♂️ (@DarioCpx) May 25, 2024