Another tale of being in the last decile

This chart revisits the percentages which the Nasdaq 100 was trading below its 200 day moving average.

Today, that percentage is at 17%.

It’s kinda towards the bottom end of recent history.

I find this study useful when I combine it with other contrarian data to decide my weighting allocation towards equities.

The most extreme percentages seen during 2022, 2008 and 2009 were between 31% & 40% below the Nasdaq 100’s 200 day moving average.

Is the current market environment today different to those times?

Well, it is because the cost of capital is rising at a larger quantum than ever seen.

In 2001/2002 it was a re-adjustment of frothy valuations.

In 2009/2009, it was a systemic banking crisis.

November 4, 2022

by Rob Zdravevski

rob@karriasset.com.au