Nasdaq Composite Momentum 05/06/22

The Nasdaq Composite (IXIC)  made its all-time high in November 2021 more than a  month before the other two main US stock indices, S&P 500 (SPX) and Dow Jones Industrial Average (DJI).  Since then, it has been the weakest index – down 26%  from its  November 2021 top.

The 05/02/22 blog “US Stock Market  Momentum and Sentiment – Part – Two – 05-02-02” noted that the bears were losing power and examined the IXIC momentum.  The  Nasdaq New – 52 – Week Lows ($NALOW) and Nasdaq 100 – Bullish Percent Index ($BPNDX), both had significant bullish divergences.  On 05/06/22 the bears  appear to have gained power.

The daily IXIC  chart courtesy of Trading View illustrates  important bottoms made since November 2021.  

The key IXIC  bottoms were made on 01/24/22, 02/24/22, 03/14/22 , and  04/27/22.   

The daily ($NALOW) chart courtesy of StockCharts.com illustrates the new lows made at  the key bottoms.

Maximum bearish momentum was made at the 01/24/22 bottom.  The 03/14/22 bottom had a double bullish divergence.  On 05/06/22 something different happened. Not only did $NALOW go above the level recorded on 04/27/22 it also exceeded the reading  made on 03/14/22. This implies  the IXIC could continue to make new decline  lows.

The daily $BPNDX chart updates the action of this indicator.

The Bullish Percent Index is  a breadth indicator based on the number of stocks on Point & Figure  buy signals within an index.

As of 05/06/22 the $BPNDX is still above its 04/27/22 reading and does not confirm the increase in bearish strength recorded by $NALOW.  If this non-confirmation continues it could  mean  only marginal new IXIC  lows.  Perhaps  one or two percent below the IXIC  – 05/06/22  bottom.   

The next blog will examine a fascinating web of Fibonacci price and time relationships within the SPX.

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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