LIVE MARKETS-Nasdaq Composite: Soon to dial down?

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NASDAQ COMPOSITE: SOON TO DIAL DOWN? (0900 EST/1400 GMT)
The Nasdaq Composite ended Friday less than 2% from its September 2
record-high close. Meanwhile, the Nasdaq's daily advance/decline line, a breadth
measure, is continuing to trend up. In fact, this internal measure of strength
has now pushed to its highest level since early October 2008.
However, with this, another Nasdaq internal measure appears severely
overheated. Thus, the Composite's ability to sustain its upward energy may soon
be in question.
Indeed, the daily New High/New Low (NH/NL) Index ended Friday at 90.2%, or
its highest reading since early June. Of note, over the past 3 years, 91.4% has
marked a top in this measure.
That said, the most severe Nasdaq declines over this period occurred in the
wake of NH/NL index divergence, or when the internal measure waned against
higher IXIC highs.
In any event, the Nasdaq NH/NL index's overheated reading is happening just
as the S&P 500, by another measure, is also hot to the touch.




(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views expressed are his own)