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BROADER NASDAQ: DUE FOR MORE THAN A FEW-DAY BOUNCE? (0900 EST/1400 GMT)

The Nasdaq Composite (.IXIC) gained more than 3% last week. read more

With this, one measure of internal strength, the Nasdaq McClellan Summation (McSum), which is based on advancing and declining issues, posted back-to-back up days on Wednesday and Thursday for the first time in more than a month read more :

The McSum ended last Tuesday at -5,106, which was its lowest level since early-April 2020. The question now is - whether this measure became sufficiently washed out that the broader Nasdaq can go the other way, and see a period of sustained strength.

Even with its sudden rise, the McSum still needs to reclaim its descending 10-day moving average (DMA), but there certainly is room for it to rise before it would meet the resistance line from its early-2021 peak, or its June/November highs.

That said, a break of last Tuesday's low would suggest its downtrend was resuming. Its December-2018/March-2020 lows were in the -5,425/-6,207 area. A decline to the late-2008 trough/support line from 2012 would call for the -6,896/-7,100 area. The support line from 2012 contained the 2018 and 2020 weakness.

Meanwhile, another measure, the Nasdaq New High/New Low (NH/NL) index has fallen back below its 10-DMA. However, at 19.8%, it remains above its early-December trough at 12.5%, which was also its lowest level since early-April 2020. read more

In any event, CME e-mini Nasdaq 100 futures are quoted up around 0.5% ahead of the open, and on track to rise for a fourth-straight day. read more

(Terence Gabriel)

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