It was certainly a busy week filled with volatility-inducing headlines that produced sharp sell-offs and stunning reversals. And all in just four trading days. Stepping back from the noise, it can be helpful to take stock of what has changed and what has not. One of the things that has not changed, is that on the NASDAQ new lows continue to outnumber new highs. It is true that there were fewer new lows on Thursday than there were at the January low. But for evidence of sustainable improvement, we don’t just want to see fewer new lows, but actually see more new highs than new lows. It has been 35 trading days since that has happened, the longest such stretch since late 2018/ early 2019 (and the second longest stretch since the financial crisis more than a decade ago). When this changes (and at some point it will) we can think about the NASDAQ from a more constructive perspective. Until then, it might be best to remember that the best rallies tend to occur within bear markets and those are best observed from the sidelines.
