LIVE MARKETS-Breadth test could hold the key to Nasdaq's next move 

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

BREADTH TEST COULD HOLD THE KEY TO NASDAQ'S NEXT MOVE

The Nasdaq Composite .IXIC notched its 22nd record close of the year on Tuesday and extended its winning streak to four sessions. But with E-mini Nasdaq 100 futures little changed ahead of Wednesday's open, traders are still waiting to see whether this week's breakout has more fuel or is due for a pause.

One indicator bulls are watching closely is the Nasdaq New High/New Low (NH/NL) Index, a gauge of market breadth that tracks the balance between stocks making new highs and new lows.

The message from that indicator has been concerning. After peaking at 67.8% on August 14, the NH/NL Index slid to 21.6% last Friday.

That drop suggests participation has been narrowing beneath the surface even as the Nasdaq has continued climbing. Mega-cap technology stocks have helped mask some of that weakness. Since August 14, the Roundhill Magnificent Seven ETF has gained 6.3%, far outpacing the Nasdaq's 1.9% rise. History shows, however, that durable advances typically require broader support than just a handful of market leaders.

Still, last week's low may prove significant. The NH/NL Index has stabilized near 22%, a level defined by a trendline stretching back to its April 2025 low. It also approached its March 31 trough of 17.6%, which occurred just one day after the Nasdaq bottomed during the late-March selloff.

That has some market watchers wondering whether Friday marked another washout-style low, potentially setting the stage for a sharp rebound in breadth and healthier participation across the Nasdaq. If so, the indicator has plenty of room to recover.

If the indicator’s March low gives way, however, it would suggest internal weakness is intensifying. During the April 2025 selloff, the NH/NL Index ultimately fell to just 7.8%, suggesting breadth could deteriorate much further if selling pressure spreads.

(Terence Gabriel)

*****

EARLIER ON LIVE MARKETS:

CHINA’S THREAT TO UNDERSEA CABLES CLICK HERE

OIL MAY TOP $150 IF DISRUPTIONS RUN INTO SPRING 2027 - BOFA CLICK HERE

TRUMP-XI: LOOKING FOR A TRADE DEAL, NOT A GRAND BARGAIN CLICK HERE

WHY EURO RATE BETS WILL KEEP SHRUGGING OFF LOWER OIL PRICES CLICK HERE

TECH STRENGTH HELPS STOXX NUDGE UP CLICK HERE

BEFORE THE BELL: EUROPE HIGHER AS OIL STAYS BELOW $100 CLICK HERE

A$ GETS A BIT PART AS AI STEALS THE SHOW CLICK HERE