Is the Nasdaq Quietly Taking the Lead Under the Hood
In my weekend breadth analysis a big weight goes to the McClellan Summation Index. I use the $NYSI and the $COMPQ for this study both independently and comparatively to judge where strength or weakness is surfacing. In this weeks review, the comparative jumped out at me. In my folder the $NASI comes first and I saw it at new highs for the move supporting the price move. This comes as the $QQQ has distracted many people as it has lagged
due to $AAPL woes. In the bottom window of the same chart, the $NAMO also seems to be breaking the downtrend line of the last slide. Then when I page forward to the $NYSI and see it is lagging price on this move so far. (Notice I didn’t call it a divergence since neither price nor the indicator have peaked for the move yet, but the under performance is notable.)
This makes me wonder if this could be more an important sign. We all know that the markets have been on a strong run and even these indicators are elevated, so no one will be surprised when a pullback does come, but two points to consider along the way. First, this could be what the market needs to see another extension what many are calling extended markets; but might instead simply be a third wave in a strong new trend. Those tend to surprise even the most ardent bulls at times. Second, if we do pullback sooner than later this is not likely the high of this move according to Tom McClellan’s own analysis which suggests a peak under 500 is where we are likely to see a more major top. If that is true, then we should be looking for relative strength in the $COMPQ breadth during the pullback and be ready to with a solid plan for the next leg up if or when it comes.
Good Luck, it is there for the making!
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