Dotcom 2.0? Nasdaq Is Getting Back to Late-1990s Giddiness
Most people know that the Nasdaq-100 had a monster run in August. But just how extended was it? By one measure, it reached levels of giddiness last seen in the dotcom bubble.
Our custom script “Distance from MA” (published on March 18) shows how far price has moved away from a given moving average. It supports simple, exponential , hull, weighted and volume-weighed MAs.
We changed its default setting from the 50-day simple to the 200-day simple. The verdict? NDX was 32.8 percent above its 200-day SMA on September 2. You have to scroll all the way back to April 7, 2000, to find a higher reading. Children born on that date are in college now!
NDX pushed that far above its 200-day SMA several times starting in 1999. This is symptomatic of a strong bull market. The fact it’s only just appearing now may suggest there’s still a lot of potential for the index to keep running.
Interestingly, the pullback from the September 2 high pushed stochastics to the most oversold levels since March.
Given the strong upward momentum and the apparent support at the 50-day SMA, this oversold condition may look like a buying opportunity to some.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Our custom script “Distance from MA” (published on March 18) shows how far price has moved away from a given moving average. It supports simple, exponential , hull, weighted and volume-weighed MAs.
We changed its default setting from the 50-day simple to the 200-day simple. The verdict? NDX was 32.8 percent above its 200-day SMA on September 2. You have to scroll all the way back to April 7, 2000, to find a higher reading. Children born on that date are in college now!
NDX pushed that far above its 200-day SMA several times starting in 1999. This is symptomatic of a strong bull market. The fact it’s only just appearing now may suggest there’s still a lot of potential for the index to keep running.
Interestingly, the pullback from the September 2 high pushed stochastics to the most oversold levels since March.
Given the strong upward momentum and the apparent support at the 50-day SMA, this oversold condition may look like a buying opportunity to some.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
