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NASDAQ 100 A-D line At New Highs

Posted By Barry Ritholtz On July 12, 2013 @ 12:00 pm In Technical Analysis | Comments Disabled

Click to enlarge
Chart [1]



Yesterday, I showed Merrill’s most active A/D line, which had broken out to new highs.

One reader [2] took exception with this, suggesting that its a case of bullish confirmation bias. I disagreed for 2 simple reasons:

-Merrill’s “Chart Talk” has been running the most active A/D chart for years;
-Any index or major technical analytical measure making a new high is newsworthy

I appreciate the insidious nature of various biases in our wetware — and I want readers to keep pushing back on anything that remotely looks like bullish or bearish bias in action.

Ironically, the day after that discussion [3], Merrill’s Technical Analysis group noted the break out in the A/D line of the Nasdaq 100 — itself at 13 year highs.

To paraphrase Stephen Colbert, sometimes Reality just has a bullish bias . . .

Text from Merrill’s wonks after the jump


The NASDAQ 100 A-D line is strong
The advance-decline line for the NASDAQ 100 (NDX) is strong with a break to new highs that preceded the new highs in the NDX.

NASDAQ 100 breaks to 13-year highs
The NASDAQ 100 (NDX) is breaking to new 13-year highs and remains in a secular bull market with upside potential to 3265-3280 (pattern count and 61.8% retracement of the 2000 to 2002 decline). The rising channel from early 2009 provides additional resistance near 3500. Key support is 2875-2800 and has held. The NDX has decoupled from Apple (AAPL), which has had a much weaker trend and at 11.25% of the NDX, AAPL remains the heaviest weighted stock in the index. The advance-decline line for the NDX is strong with a break to new highs that preceded the new highs in the NDX (side bar).


NASDAQ indices break to new 13-year highs
Stephen Suttmeier and Jue Xiong
Merrill Lynch, July 12, 2013
Technical Analysis
Market Analysis | United States

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2013/07/nasdaq-100-a-d-line-at-new-highs/

URLs in this post:

[1] Image: http://www.ritholtz.com/blog/wp-content/uploads/2013/07/nadaq.png

[2] reader: http://www.ritholtz.com/blog/2013/07/advance-declines-break-out-to-new-highs/#comment-677710

[3] discussion: http://www.ritholtz.com/blog/2013/07/advance-declines-break-out-to-new-highs/#comment-677711

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