What’s wrong with Nasdaq? Something worrying in the case of the bulls
According to Raymond James, Wall Street continued to post several new record highs in October, but the absence of a major index from the list is starting to become apparent. Quantitative and technical strategist Javed Mirza pointed out in a note to clients that the Nasdaq 100 has not set a record high since July. According to Mirza, that tech-heavy index’s relative struggles could be a sign that the broader bull market is about to enter a new phase — and near a peak. “The Nasdaq 100 is a good proxy for the more ‘growth’ areas of the market and this negative divergence suggests that Portfolio Managers have begun to shift away from the upside-oriented areas market growth, consistent with the transition to the final phase of the current 4-Year Cycle, the Nasdaq 100 failed to regain its July high, despite the S&P 500, TSX. Composite and Dow Jones Industrials both hit new all-time highs,” Mirza wrote. NDX mountain 6M Nasdaq 100 has not set a new record since July. On Monday, the Nasdaq 100 index traded lower 2% from its record close. Technical indicators suggest it won’t close that gap anytime soon: “The Nasdaq 100 just triggered a short-term ‘mechanical sell’ signal,” Mirza said new, different from other North American stock indexes. The Nasdaq 100 decline is not the only factor pointing to a new phase for the bull market: Other notable data points include including the Cboe Volatility Index (VIX) making higher lows and Canada’s TSX Composite outperforming the S&P 500, while WTI crude’s push above $94/bbl would be the fourth point. To be sure, even the late stages of a bull market can last quite a while. Mirza says the “path of least resistance” remains higher for stocks overall heading into 2025.
