LIVE MARKETS-Nasdaq composite: Ripe to wrestle its way back up?

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NASDAQ COMPOSITE: RIPE TO WRESTLE ITS WAY BACK UP?

The Nasdaq composite .IXIC ended Thursday down 18.8% from its record closing high.

Meanwhile, in another sign of an index getting pretty washed out internally, the Nasdaq New High/New Low index (NH/NL) has plunged below 10%:

The NH/NL index ended Thursday at 7.8%, which is its lowest level since November 2, 2023. Back at that time, the composite had ended its more than 12% July-October slide on October 26. The NH/NL index bottomed four trading days later, on November 1, at 4.8%.

Since the Financial Crisis, when this internal measure bottomed at a record low of 0.5% in November 2008 (Refinitiv data back to mid-1995), and then at 0.9% on March 6, 2009, one trading day ahead of the Nasdaq's low close in that bear market (-56%), the NH/NL index has seen 13 major and secondary sub-10% troughs.

(Average 5.1%, Median 4.8%)

Additionally, this measure has shown a tendency to V-bottom rather than crawl along at extremely low levels for an extended period.

Thus, although it could still get closer to zero, at the current reading of 7.8%, it would appear near a low of some form. This can suggest the composite is especially ripe for more than just a one-day relief rally, or indeed, a major low.

The NH/NL index's descending 10-day moving average should be around 15% on Friday.

(Terence Gabriel)

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