LIVE MARKETS-Nasdaq composite breadth/momentum gets a boost

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NASDAQ COMPOSITE BREADTH/MOMENTUM GETS A BOOST

On April 8, the Nasdaq composite .IXIC ended down 24.3% from its December 16 record closing high. With this, the ratio adjusted McClellan Oscillator, a breadth/momentum measure based on advancing and declining issues, normalized to account for changes in the total number of issues traded over time, plunged to a more than two-year low (using LSEG data).

On Tuesday, the composite, which has been swinging violently, ended at 16,300, putting it up about 7% from its April 8 finish. With this, the McClellan Oscillator has surged. In fact, it ended Tuesday at a three-month high.

Meanwhile, the McClellan Summation, a running sum of the McClellan Oscillator values, is showing burgeoning internal strength:

On April 11, three trading days (tds) after the composite's low close, the Summation fell to its lowest level since November 2, 2023.

Of note, back in late 2023, when the composite ended its July-October correction on October 26, the Summation bottomed two tds later on October 30. The measure then launched into a 43 td advance as the Nasdaq's renewed advance gained steam.

At this time, the Summation has now risen 6-straight tds and has reclaimed its 10-day moving average.

To add confidence in more than just a short-term IXIC counter-trend bounce, bulls want to see this breadth/momentum measure continue to trend higher, and not quickly fall back below its 10-DMA.

Traders are also still eying the composite's price action vs resistance at its March 11 intraday low at 17,238.24 as well as the 76.4%-78.6% Fibonacci retracements of the March 25-April 7 down-leg in the 17,455.82-17,532.75 area.

(Terence Gabriel)

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