LIVE MARKETS-Nasdaq composite's tradable low, can it last?

ReutersMar 18, 2025 1:02 PM

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NASDAQ COMPOSITE'S TRADABLE LOW, CAN IT LAST?

Last Thursday, the Nasdaq composite .IXIC ended down 14.23% from its December 16 record close. With this, one measure of the composite's internal strength, the New High/New Low (NH/NL) index, tumbled to 15.6%, or its lowest level since early November 2023.

Market players had been searching for a tradable low and since last Thursday's close, the composite has jumped about 3%, while the NH/NL index has reversed to the upside:

The internal strength measure ended Monday at 19.5%, putting it just above its descending 10-day moving average which finished at 19.1%.

When washed out to the downside, the NH/NL index has a tendency to turn violently with a V-bottom. Thus, bulls are heartened by this sudden emergence of strength.

That said, if this turn is to prove similar to the initial advances which emerged out of the 2022 bear market's end (-36.4% for the IXIC on a closing basis), or in the wake of the correction that ended in October 2023 (-12.3% on a closing basis), then the NH/NL index would likely need to be in the early stages of a sustained rise to 70%+.

Additionally, the composite, which ended Monday at about 17,809, will need to reclaim its 233- and 200- DMAs, which are now hurdles around 18,115 and 18,435.

An examination of the composite's behavior during its 2021-2022 bear market shows that not only did the NH/NL index struggle to sustained strength, but the IXIC failed to reclaim these long-term moving averages.

Of note, during the 2021-2022 bear market, NH/NL index bounces from sub-20% levels, on average, stalled at just 37%.

A NH/NL index break below 15.6% can once again threaten sub-10% levels, which would likely coincide with renewed downside pressure on the composite.

(Terence Gabriel)

FOR TUESDAY'S EARLIER LIVE MARKETS POSTS:

TIGHT GERMAN VOTE: "NO LESS THAN 489" - CLICK HERE

RECORD HIGH BUYBACKS HELPING UNDERPIN EUROPE - CLICK HERE

DAX TOPS THE CHARTS, GERMAN SMALLCAPS EVEN BETTER - CLICK HERE

BEFORE THE BELL: EUROPEAN FUTURES RISE, END OF SELL SIGNAL - CLICK HERE

ALL EYES ON TRUMP-PUTIN TALK, AND THEN ON CENBANK DELUGE - CLICK HERE

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