Nasdaq Stocks Lag While Emerging Market Nerves Hit High

This is an abridged version of our Daily Report.

Some lag during latest leg

The Nasdaq Composite closed at a 52-week high on Friday but relatively few stocks have come along, with fewer than 60% of members trading above their 50- and 200-day averages.

The one-year return in the Nasdaq averaged -2.2% when so few stocks were above their averages versus +14.9% otherwise.

Emerging nerves

The “fear gauge” for emerging markets is extremely high versus U.S. stocks. It’s at a 52-week high while the VIX is near the bottom end of its own range. The two other times there was so much relative anxiety, emerging stocks did better.

Transports sending a signal

The Dow Transports closed just above its 200-day average. When it’s in a downtrend, it has served as a headwind for the Dow Industrials. When the Transports were above the 200-day, the Industrials advanced at an annualized +9.1%. When the Transports were below the 200-day, the Industrials only returned an annualized +3.9%.

More lag

A day after the S&P set a 100-day high, the McClellan Oscillator is already showing slowing breadth momentum by closing below zero.