LIVE MARKETS Nasdaq Composite: Stoking the furnace?

  • U.S. equity index futures ~flat to sightly higher
  • Euro STOXX 600 index up ~0.3%
  • Dollar, gold ~flat; crude, bitcoin fall
  • U.S. 10-Year Treasury yield slips to ~1.47%

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NASDAQ COMPOSITE: STOKING THE FURNACE? (0900 EST/1400 GMT)

Despite less than stellar breadth readings on Friday along with the S&P 500's (.SPX) fresh record-high close read more , the Nasdaq New High/New Low (NH/NL) index, has made a constructive turn:

IXICNHNL12132021

This measure of internal strength may have become sufficiently washed out with the Nasdaq's (.IXIC) recent weakness. After falling to 12.5% on December 6 read more , which was its lowest reading since early-April 2020, the NH/NL index has now risen four-straight days.

In so doing, this measure ended Friday at 21.1% which put it above its descending 10-day moving average, at 19.5%, for the first time since November 12. read more

It now remains to be seen if last week's sharp NH/NL index upturn from especially depressed levels will lead to the broader Nasdaq re-heating, and therefore, fuel a more sustained IXIC rise. Indeed, there certainly is room for the NH/NL index to rise before it will encounter resistance lines from its highs earlier this year. The measure's early November peak was at 75.7%.

Of note, current readings on the NYSE show a similar picture as the Nasdaq. After also falling to its lowest level since early-April 2020, the NYSE's measure also ended Friday above its 10-DMA.

A Nasdaq NH/NL index violation of its Dec. 6 low can open the door for a test of its March 2020 trough at 1.2%, something which could put the IXIC on ice.

(Terence Gabriel)

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Terence Gabriel is a Reuters market analyst. The views expressed are his own

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