NASDAQ Buying Climaxes Send a Message

Key points:

• Not every "squiggle" from every indicator "means something." Some indicators "speak" only rarely, but when they do, they typically say something useful
• Our Nasdaq 100 Buying Climaxes indicator recently crossed a significant threshold
• Significant market gains have typically followed the signal detailed below; however, the signal itself is best considered as "weight of the evidence" and not as a "set it and forget it" buy signal

A closer look at Nasdaq Buying Climaxes

Our Nasdaq 100 Buying Climaxes indicator shows the number of Nasdaq 100 stocks that reached a 52-week high during the week and then closed below their prior week's close. It suggests a climax in investor buying interest, a sign of exhaustion. There is another way to utilize this data, and that is to note a lack of buying climaxes, followed by an increase from a low level. 

The chart below highlights all dates when the 150-day moving average of the Nasdaq 100 Buying Climaxes indicator crossed above 0.24. The most recent signals occurre