Berkshire’s Cash Hoard Soars, Technical Indicators Signal Dire Warning for 2024

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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.

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