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Thursday, March 28, 2024

This Has Never Happened Before To The Nasdaq

Courtesy of ZeroHedge. View original post here.

Via Dana Lyons’ Tumblr,

No 52-week high in the Nasdaq 100 has ever been accompanied by as few advancing stocks as today’s.

As most readers know, we are big proponents of strong breadth, or participation, in signifying healthy markets. When rallies are accompanied by a large swathe of advancing stocks, it is more likely to go further and last longer than those coming on the back of just a relatively few stocks. As such, it was encouraging to see the significant level of participation during the August-October stock market rally. Recent efforts, however, have not been so robust.

Today’s action on the Nasdaq exchange is Exhibit A. On the one hand, the Nasdaq 100 (NDX) managed to rally – again – closing at a new all-time high – again. Despite the new high, however, the breadth on the Nasdaq read as follows (according to our vendor):

  • Nasdaq Advancing Issues: 840
  • Nasdaq Declining Issues: 2105

If that seems unusually skewed to decliners considering the NDX hit a 52-week high, you are on to something. As a matter of fact, at 28.5% of all issues, today saw the fewest advancing issues ever on a day when the NDX closed at a 52-week high.

So, is this dwindling participation a serious warning sign for the rally? Or is today a random outlier, irrelevant to the bigger picture?

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If you’re interested in the “all-access” version of our charts and research, please check out our new site, The Lyons Share. Find out what we’re investing in, when we’re getting in – and when we’re getting out. Considering what we believe will be an investment environment tailor made for our active, risk-managed approach, there has never been a better time to reap the benefits of this service. Thanks for reading!

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