The NASDAQ Composite Index, with the help of its NASDAQ 100 big-stock components, posted a new all-time closing high on Thursday, shaking off Wednesday’s bearish higher-volume churning action. The index looks strong as it pushes back up toward its highs, but the rally is being led mostly by the big-stock NASDAQ names.
The lack of breadth on this move back up to new closing highs is evident in the NASDAQ Advance-Decline chart, below. So, as the NASDAQ has consolidated over the past seven weeks, breadth has deteriorated. In an Ugly Duckling market, this may or may not be bearish.
Tracking lower at an even steeper rate is the number of NASDAQ stocks currently trading above their 50-day moving averages. This also argues for the fact that as the NASDAQ has consolidated for seven weeks, the situation with respect to individual stocks has deteriorated on the basis of this chart.
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