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This column was originally published on RealMoney on Feb. 3 at 3:14 p.m. EST. It's being republished as a bonus for TheStreet.com readers.

As attractive as the market has looked since the start of the year, it's just not possible to have a bull market without the participation of

General Electric

(GE) - Get General Electric Company Report

or

Citigroup

(C) - Get Citigroup Inc. Report

.

A look at the long-term charts of these two market bellwethers shows just how precarious the market's position really is -- that is, if you accept the premise that GE and Citi really do make a difference.

In July, I

established that GE functions as a leading indicator for the

S&P 500

because of the conglomerate's unusual diversity. As GE goes, so goes the S&P. Citigroup, as a global financial institution, tends to act as a good barometer of the economic and monetary environment.

Movements in Citigroup also generally correlate with the S&P 500, so it's quite unusual for one to diverge too much from the other. As a financial proxy, Citi tends to lead the S&P 500.

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The charts of these two leaders are not encouraging. GE's stock already has broken down, and the last time this happened, it lead to the bear market of 2000-2002. Citi hasn't broken down yet, but it is just one bad month away from some serious downside action. Let's examine each in more detail.

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General Electric

On this monthly chart of GE, look at the low pivot point at point A, and note that last month's close was below this level. The last time this happened was November 2000 (point B), which marked the top of the 20-year bull market.

The only other instance in the past 20 years was in the fourth quarter of 1994. GE closed below a prior pivot low for only one month before reversing to kick off the bull market of 1995-2000.

As GE Goes...
Its monthly chart flashes several warnings for the broader market

Click here for larger image.

Source: TheTechnicalTake.com

Look at the anatomy of this top in GE. The break of the yellow trendline is the first warning sign. The second warning sign is the volume pattern. This shows more distribution than accumulation. Note that the biggest volume spikes are all associated with down months. More importantly, after those months, prices went higher on declining volume, especially throughout 2004 (red oval on chart). Last, note the triple top.

If this close below the prior pivot point low holds, I believe GE has downside risk to $30. The next level of support is at $23.50, which is where prices bottomed in March 2003. The implications for the general market as a whole are not good.

Citigroup

Citigroup has not broken down yet, but within the consolidating triangle that can be seen on its monthly chart, price has been making a series of lower highs. If prices break below the support trendline, there is downside risk to $40 and $37.

Also note the volume pattern. Over the past two years, the largest spikes in volume were seen in months that the stock was down. Following those months, Citi's price moved higher, but on diminishing volume. This suggests weakness rather than strength.

Not Cracked Yet
But Citi breaking below its trendline would be a negative

Click here for larger image.

Source: TheTechnicalTake.com

I must emphasize that Citi hasn't cracked yet, but it is far from being a picture of strength. A break above the downsloping trendline would indicate that bull-market conditions are likely to continue. A break below that trendline would point to real trouble.

Exxon Mobil

Although not necessarily considered a bellwether,

Exxon Mobil

(XOM) - Get Exxon Mobil Corporation Report

has been a recent market leader. As such, its behavior can signal investor sentiment. I believe it currently indicates downside risk. Exxon has formed a triple top and looks about to roll over, and this is apparent on its weekly chart.

Slippery
Exxon momentum appears to be slowing

Click here for larger image.

Source: TheTechnicalTake.com

Point 1 is back in March 2005, and it represents a significant upthrust in price. This point has acted as overhead resistance for the current price thrust and the one in September 2005. The current upswing in prices appears to be printing a failed thrust. We see a failed thrust when price moves outside the upper band, but the moving average of price (the heavy blue line on Exxon's chart) does not. This is suggestive of slowing momentum. Price has not rolled over yet but a close below $61 would be likely to lead prices lower.

Downside targets are the 40-week moving average at $59, followed by the support level at $56. A weekly close above $64 would mean that this analysis was wrong.

A couple of weeks ago, in deference to the small-cap rally,

I said, "Look under the hood, and you will be surprised at the market's strength." I am still willing to give the market time to prove itself. However, given the weakness in GE and Citi

and

risk to market leader Exxon, I have a hard time envisioning a bull market here that would lead to a multimonth sustainable expansion in prices.

Of course, things could change. GE could reverse and break back above the pivot low. Citigroup could break out from its triangle pattern. If either were to happen, I would embrace these bullish developments.

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Lerner is an anesthesiologist and freelance writer who trades for his own account. He blends technical and fundamental analysis to find factors that lead to sustainable moves in the markets. Lerner's approach is research-driven and focuses on supply-demand issues, investor sentiment, intermarket relationships and monetary liquidity. He is a member of the Market Technicians Association and is the founder of

TheTechnicalTake.com

, a Web site that offers content, commentary and strategies for investors and traders. Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. He appreciates your feedback and invites you to send your comments by

clicking here

.