• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Using Nasdaq 100 Specific Breadth to Measure Risk Appetite
Stock

Using Nasdaq 100 Specific Breadth to Measure Risk Appetite

by July 15, 2024
by July 15, 2024 0 comment
Share
1
FacebookTwitterPinterestWhatsapp

The Nasdaq 100 is a major driver in the stock market and Nasdaq 100 breadth indicators should be part of our broad market analysis routine. 84 Nasdaq 100 stocks (16.8%) are also in the S&P 500 and their weighting accounts for over 30% of the S&P 500. In fact, the six largest stocks in the S&P 500 come from Nasdaq 100 and account for 31.26%. The chart below shows the holdings for each index. Also note that both are in long-term uptrends.

Nasdaq 100 stocks also represent the risk appetite within the stock market. These stocks typically have higher growth rates and higher Betas. Chartists can track performance for Nasdaq 100 stocks using Nasdaq 100 specific breadth indicators. I want to trade Nasdaq 100 stocks and be fully invested when these indicators are bullish. I want to shun Nasdaq 100 stocks and raise cash when these indicators are bearish. We use a similar model for our Dual-Momentum Rotation Strategies at TrendInvestorPro. To this end, I am using three long-term breadth indicators to quantify Nasdaq 100 conditions. The chart below shows the percentage of Nasdaq 100 stocks above their 150 and 200 day SMAs as well as 52-week High-Low Percent. The latter is the percentage of 52-week highs less the percentage of 52-week lows.

All three indicators are long-term oriented and I am using bullish/bearish thresholds for signals. Divergences do not figure into my analysis because these are, more often than not, just distractions. Notice how QQQ advanced even as bearish divergences formed throughout 2024 (red arrow-lines). I will stick to the signals and ignore the nuance. NDX %Above 200-day SMA turns bullish with a move above 60% and stays bullish until a bearish signal triggers with is a cross below 40%. Adding signal thresholds above/below the midpoint (50%) reduces whipsaws. NDX %Above 150-day turns bullish with a move above 70% and bearish with a move below 30%. These thresholds are wider because the moving average is shorter. And finally, NDX High-Low Percent turns bullish with a move above +10% and bearish with a move below -10%.

Using all three indicators, chartists can take a weight of the evidence approach for assessing the Nasdaq 100. The bulls rule when two of the three indicators are on bull signals and the bears rule when two of the three are on bearish signals. A bearish signal triggered in January 2022 and a bullish signal triggered in early February 2023.

TrendInvestorPro recently introduced a market timing model based on long-term breadth indicators for the S&P 500 and Nasdaq 100. We published an extensive report and video describing this model and how it compares to models that use small-cap breadth. This model will be used for our Dual Momentum Rotation Strategy that trade Nasdaq 100 and S&P 500 stocks. Click here to subscribe and gain immediate access.

////////////////////////////////////////

You Might Also Like
  • Costco’s Record-Breaking Surge: Is It Time to Buy or Sell?
  • Unmasking Market Moves: Why Focusing on Individual Stocks Beats Indexes in 2024
  • Expedia (EXPE) Taking The Road Less Traveled
  • Is Intel Now A Market Leader?
Share
1
FacebookTwitterPinterestWhatsapp

previous post
Biden-Trump poll shows nearly 80% of voters worried about president’s mental, physical fitness after debate
next post
TIME TO USE YOUR DISCRETION AS SECTOR HELPS PROP UP EQUITIES?

You may also like

Riding the Cryptocurrency Wave: How to Maximize Your Gains

November 14, 2024

Price Pays… But For How Long?

June 20, 2024

Why SMALL CAPS MATTER in January 2024

January 19, 2024

Finding the Leaders after a Sharp Decline – with Video...

September 26, 2023

DP Trading Room: This is the ONLY Sector Showing STRENGTH...

October 2, 2023

S&P 500 Sinks on Software and Semiconductor SELLOFF

May 30, 2024

Navigating the Indecisive SPY: What Investors Should Know

December 19, 2024

Fresh Trade Opportunities as Market Eases Up on the Reins!

December 2, 2023

AU Surges Above Resistance: Here’s How to Take Action

April 1, 2025

The Ord Oracle March 6, 2023

March 7, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout, pulls outlook

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025
    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,633 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,303 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,186 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout,...

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    SPY Weekly Chart Breaking Down

    January 3, 2025

    The Ord Oracle July 11, 2023

    July 13, 2023

    Fed’s Rate Pause: Does It Really...

    June 14, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here