A rare occurrence for the Nasdaq

This is only the 6th time in 10 years (starting with a 9% reading in September 2011) that the Nasdaq 100 has traded at a notable percentage below its 200 day moving average, which I have marked on the chart below.

And at each time, it also coincided with a 3 standard deviation move below its Weekly mean.

There is also a reasonable omen with the U.S. 2 year Treasury Note yield registering a Weekly Overbought signal (for only the 6th time in 15 years).

Past mean reversion’s in those 2’s had aided a Nasdaq advance.

January 26, 2022

by Rob Zdravevski

rob@karriasset.com.au

The NASDAQ is not in a bubble

As the Nasdaq 100 (and S&P 500) completes a bearish outside reversal month, I wanted to show that historically, this index is not in a bubble.

The index is trading at an extreme and although the P/E ratio and other valuation metrics are lofty, they are not at all time highs.

They are not in a bubble.
We have not seen a mania.

Although it is cringeworthy that 5 stocks (Apple, Amazon, Microsoft, Alphabet & Facebook) make up 45% of the index’s weighting, the Nasdaq 100 is yet to trade to the stratospheric percentage levels above its 200 day moving average, as seen in 2000.

My macro view on this index is another thing.
hint – I am not a buyer of the Nasdaq 100 Index.
(see my other posts about certain Nasdaq stocks resembling the Nifty 50)

p.s. be careful of those using the word ‘bubble’, especially when they use it for effect and more so, without doing their research.

Those type of folks tend to fabulously successful reaping reward by selling fear to the uninformed and the jittery.

September 30, 2020
by Rob Zdravevski
rob@karriasset.com.au

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