Tech recovery

The long-term McClellan Summation Index for the Nasdaq 100 (NDX) is about to turn positive. This will be its first positive reading in well over a month, after having been severely negative. The Backtest Engine shows good returns for the NDX over the next two months, with a 75% win rate and 4.4% average return. If we stipulate that the Summation Index must have been negative for at least 30 days, and reached at least -750, then 11 of the 12 signals were positive two months later, averaging 5.2%. The loss was from June 2004, which recovered soon after. Some of the winners, though, especially in 2001, rolled over into losses longer-term.