LIVE MARKETS-Nasdaq bulls feeling their oats again

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NASDAQ BULLS FEELING THEIR OATS AGAIN

The Nasdaq Composite .IXIC rose for a third day in a row on Tuesday and reclaimed its 50-day moving average, as the recovery off last week's lows gained steam.

Indeed, after the IXIC tumbled about 8% from its October 29 record close to its November 20 closing low, and as much as 9% from its October 29 record intraday high to its November 21 intraday low, bulls are feeling their oats again.

The Composite closed Tuesday down 3.9% from its record finish and 4.1% from its record intraday high. With this, it's on track for its biggest weekly gain since August. That said, the Nasdaq is also on track to end a seven-month win streak. The Composite last rose seven months in a row in January 2018.

Given recent instability, measures of the Nasdaq's internal strength also took a big hit. In fact, the Nasdaq New High/New Low (NH/NL) index plunged from 83.4% on September 23 to 29.7% on November 24. Monday's 29.7% reading was its lowest since April.

On Tuesday, this measure hooked up to 30.7%. The question now is whether that 29.7% reading signaled a sufficient washout. In any event, bulls will want to see this nascent turn continue and the NH/NL index reclaim its descending 10-day moving average (DMA), which should be just over 32% on Wednesday. This measure has been below its 10-DMA for the last 20 straight trading days.

Sharp NH/NL index V-bottom reversals, which then saw it trend back above its 10-DMA, may add confidence in a renewed Nasdaq advance.

(Terence Gabriel)

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